Knight, Death Row file for bankruptcy

updated 11:11 p.m. ET April 4, 2006

LOS ANGELES - Rap music mogul Marion “Suge” Knight staved off receivership for Death Row Records by seeking bankruptcy protection for himself and the record company Tuesday, claiming debts of more than $100 million in each filing. Knight also avoided a criminal contempt citation.

The bankruptcy filings were reported to a judge during a Los Angeles Superior Court hearing on Knight’s debts.

At issue is an unpaid judgment against Knight for $107 million that was awarded to Lydia Harris, a former Knight associate who claimed she helped start the rap record empire with her former husband, Michael Harris.

Lydia Harris’ attorney, Rex Beaber, sought the contempt citation on grounds that Knight had failed to appear at court-ordered debtor hearings, but Judge Ronald Sohigian said there were no grounds for such a finding because Knight had never been served with notice to appear.

Knight, whose Death Row artists in the 1990s included Snoop Dogg and the late Tupac Shakur, was not present.

The bankruptcy filings thwarted an effort to put Death Row Records into receivership, in which a court appointee would have held the business in trust pending resolution of the claim.

Sohigian had previously ordered receivership but stayed implementation pending Tuesday’s hearing. But the filings in federal bankruptcy court halted any state court actions involving receivership.

Knight’s attorney, Laurence Strick, said his client will continue to operate the company while the bankruptcy matter goes forward in federal court.

Beaber had hoped the request for a contempt citation would send Knight to jail.

“This is necessary not to benefit Lydia Harris but to confirm that every citizen, no matter how powerful, must obey the lawful orders of the court,” the attorney said outside court.

Strick dismissed that explanation.

“They wanted a pound of flesh,” he said.

Strick said his client was attempting to reorganize his financial affairs.

“Mr. Knight doesn’t have $107 million,” Strick said. “It remains to be seen what becomes of Death Row.”

Strick said Knight was “optimistic” and “focused.”

“He’s doing great. He’s remarkable in his ability to handle stress,” he said.

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Knight 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.

In the current case, 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.

Michael Harris also claims he put up $1.5 million from behind bars to help start the record label, a contention that Knight has repeatedly denied.

Beaber said the bankruptcy move by Knight was not a surprise.

“Bankruptcy is by its nature the last and final stop in these games of delay,” he said.

Both Death Row Records Inc. and Knight filed for protection under Chapter 11 of federal bankruptcy law.

Knight signed Death Row’s filing as president of the label. It estimated assets of $1 million to $10 million and debts of more than $100 million.

Knight’s personal filing estimated assets of zero to $50,000 and debts of more than $100 million. . In an interview outside court, Beaber contended that Death Row makes “many millions” of dollars in royalties each month.

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