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Jackson rejig to avoid debt crunchDebt-ridden pop star in deal with co-owner of Beatles songs
 Michael Jackson used the music catalog to secure $270 million in loans. RELATEDYOUR E-MAIL ALERTS(CNN) -- Pop star Michael Jackson has struck a deal with the co-owner of his lucrative song catalog, which includes many of the Beatles biggest hits, and several lending institutions to help pay off his multi-million-dollar debts. Details of the new agreement -- reached between Jackson and Sony Corporation of America, his partner in the Sony/ATV Music catalog -- have not been disclosed. The New York Times reported Thursday that Jackson agreed to give Sony the option to buy half of his stake in the catalog, which has been valued at about $1 billion, at an undisclosed price. The Times said it obtained its information from people briefed on the deal. The newspaper also said that as part of the deal, Jackson -- who has borrowed heavily against his stake in the catalog -- reached a refinancing agreement with Fortress Investment Group, the New York hedge fund that now holds those loans, to reduce his interest payments. Jackson bought the rights to the songs in the Beatles catalog in 1985 for $47.5 million, outbidding Paul McCartney. He later sold half of the enterprise to Sony and used the rest as collateral for loans from Bank of America. Last year, fearing that Jackson might default, the bank sold two loans valued at $270 million to Fortress. Jackson had secured those loans with his Sony partnership, his own music library and a partial deed to his Neverland Ranch near Santa Barbara, California. Thursday's statement was issued through a law firm in Bahrain, the Persian Gulf country where the 47-year-old Jackson has been living since shortly after being acquitted of child molestation charges in California last June. The refinancing agreement was structured by Citigroup and involved negotiations with "several leading financial institutions," the statement said. A Bahraini financial adviser, Ahmed Al Khan, advised Jackson on the deal, according to the statement. During Jackson's trial, prosecutors presented evidence from forensic accountants that he was deeply in debt and headed toward insolvency because was spending $20 million to $30 million more each year than he was making. However, Jackson's defense insisted his money woes were not as serious as prosecutors were making them out to be. In March, state labor officials in California ordered Jackson to pay $304,000 in back wages to employees at Neverland and slapped a stop work order on the ranch because its workers' compensation insurance had lapsed. He was also fined about $150,000 for violating state labor laws. Instead of arranging workers' compensation coverage for his own employees, Jackson has made arrangements with an employment agency to bring a total of 10 employees back to Neverland, including animal care workers, security guards and a ranch manager, according to Dean Fryer, a spokesman for the California Department of Industrial Relations. "The employee leasing agency has workers' compensation insurance. It is an acceptable way to bring workers on to the job site," he said. Santa Barbara County tax records also show Jackson failed to make property tax payments for Neverland in both December and April. He now owes $189,700 in back taxes and penalties. --CNN Senior Producer Dree DeClamecy contributed to this report. 
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