By Linda Deutsch AP Special Correspondent
5/7/2006 7:06:07 AM
Tags and topics realted to this article include Suge Knight, 2Pac and Snoop Dogg. Hip Hop, Rap, Law and Record Labels.
Rap music mogul Suge Knight testified Friday that his Death Row Records struggled after he was jailed several times and hit with a $107 million judgment in a case by a couple claiming they helped start the label.
Knight answered questions about his business at a federal bankruptcy hearing intended to give his creditors a chance to ask about his assets and his debts of more than $100 million.
Testifying in a near mumble, Knight told a bankruptcy trustee that his incarceration handicapped the label that had topped the charts in the 1990s with artists such as Snoop Dogg and Tupac Shakur.
Asked how he knew the company was struggling while he was behind bars, Knight answered, "The magazines told me that and the records," referring to releases by the label.
Knight didn't answer a number of questions and repeatedly conferred with an accountant. He said he had never seen a profit and loss statement but had reviewed income tax returns.
Under questioning by creditors, he denied having money tucked away in foreign countries or in an African company that deals in diamonds and gold.
Bankruptcy documents filed on April 20 showed Knight had no income this year from employment or operation of a business. His bank account contained just $11, and he owned clothing worth $1,000, furniture and appliances valued at $2,000, and jewelry worth $25,000, according to the records.
His biggest asset was listed as unspecified publishing/copyrights worth $4.4 million. However, the Internal Revenue Service had placed a lien on that intellectual property to cover taxes of $11.3 million, the records showed.
Lawyers asked few questions about those figures during the hearing that was delayed several times when Knight said he was ill. The proceedings were set to resume on June 23.
Knight said he decided to close the doors of Death Row after the judgment was issued against him and he lost a lease.
"The office wasn't there, but we had to finish our obligations," he said.
Some of that work might have been done with a $500,000 payment received earlier this year from a music distributor, he said.
Asked outside court if he would eventually try to revive Death Row, Knight said "yes" and added, "Got to play for the people."
Knight has a history of legal problems. He was convicted of assault in 1992 and placed on probation, then jailed for five years in 1996 for violating that probation.
He was returned to jail in 2003 for again violating parole, this time by punching a parking attendant at a Hollywood nightclub. He was released the next year.
Knight's decision to file for bankruptcy protection on April 4 staved off a move by the court to appoint someone to take control of the record label and his assets. He also avoided a criminal contempt citation for failing to show up at state court hearings.
The federal filing halted the state court action in which former couple Lydia and Michael Harris are trying to collect a $107 million judgment from Knight. They claim they helped found Death Row.
Michael Harris, an imprisoned drug dealer serving a 28-year sentence at San Quentin Prison, is claiming half of the $107 million as community property in his divorce from Lydia Harris.
On Friday, Knight testified that he had reached an agreement with Lydia Harris, saying "I settled for a million and signed off on it."
Harris told reporters she had received a $1 million payment but had not agreed to settle the matter.
"I'm telling you, I didn't do a settlement for $1 million. That's ridiculous. Let's keep it real," she said.
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