The embattled hip-hop mogul has reportedly made 'a series of financial decisions over the past year to help shield his fortune from potential credits' amid his legal woes.
- September 26, 2024
AceShowbiz - Sean "P. Diddy" Combs is one step ahead in protecting his wealth amid his legal drama. The embattled music mogul reportedly prepares to file for federal bankruptcy protection following his arrest for alleged sex crimes.
According to Media Take Out, the 54-year-old has hired bankruptcy lawyers and is preparing to file for bankruptcy to protect his fortune. Multiple sources close to the rapper tell the outlet that Diddy has hired a top Miami law firm to help him file for bankruptcy, to protect him from creditors, which will likely include the dozens of victims who are suing him.
The music and entertainment mogul apparently saw his downfall coming as he has made a series of financial decisions over the past year to help shield his fortune from potential credits. The decisions allegedly included transferring his assets to his children's trusts and paying off his home's mortgage.
"He has trusts for all his kids, where he transferred assets to them," one source spills. Under U.S. law, any money that Diddy put in an "irrevocable" trust for his children can not be taken by any of his creditors or victims, as explained by the source, who is a lawyer.
Diddy also sold a lot of stock and assets, and paid off his Florida mansion's mortgage. The so-called insider explains, "Under Florida law, if a debtor files bankruptcy, his creditors [or victims] can not get their hands on the debtor's primary home."
Diddy's Miami mansion is currently worth $50M, without a mortgage. "Think of that home as like a giant $50M piggy bank, that none of his creditors can take from," a legal source says.
The insider adds, "Diddy may be in prison for the next 8 years. So when he gets out, he'll have perfect credit, and a house that's probably worth $75M [at that future time], and he's have all that and be completely debt free."
Diddy is reportedly expected to file for bankruptcy "as early as this week." He is currently held behind bars at the Metropolitan Detention Center in Brooklyn and placed on suicide watch after he's denied bail twice.
