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One year ago, Forbes magazine had labeled Sean “Diddy” Combs” as a billionaire. Now Media Take Out exclusively learned that Diddy has hired bankruptcy lawyers, and is preparing to file for federal bankruptcy protection.
CANNES, FRANCE – MAY 20: Actor and Musician Sean Diddy Combs attends the “Changeling” Premiere at the Palais des Festivals during the 61st Cannes International Film Festival on May 20, 2008 in Cannes, France. (Photo by Toni Anne Barson/WireImage)
According to multiple sources, close to Diddy, we’ve learned that the music and entertainment mogul 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.
We’re told that Diddy has made a series of financial decisions – over the past year – to help shield his fortune from potential credits.
LONDON, ENGLAND – NOVEMBER 08: P. Diddy seen leaving Bauer Media on November 08, 2023 in London, England. (Photo by Ricky Vigil M / Justin E Palmer/GC Images)
The source explains, “He has trusts for all his kids, where he transferred assets to them.”
Under US law, any money that Diddy put in an “irrevocable” trust for his children can not be taken by any of his creditors or victims, our source – who is a lawyer – explained.
He also sold a lot of stock and assets, and paid off his Florida mansion’s mortgage, also a move to protect his assets.
Our insider continued, “Under Florida law, if a debtor files bankruptcy, his creditors [or victims] can not get their hands on the debtor’s primary home.”
HOLLYWOOD – AUGUST 12: Rapper P. Diddy arrives at the premiere of Warner Bros.’ “Lottery Ticket” at Grauman’s Chinese Theater on August 12, 2010 in Hollywood, California. (Photo by Alberto E. Rodriguez/Getty Images)
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,” our legal source continued.
Typically bankruptcy destroys a person’s credit for about 8 years. But in Diddy’s case, that might not be that big of a deal.
The insider continued, “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.“
We’re told to expect Diddy’s bankruptcy filing “as early as this week.”
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