Rap mogul Marion "Suge" Knight testified at a bankruptcy hearing Friday (May 5) that Death Row Records has struggled financially because of his frequent incarcerations, in addition to a $107 million lawsuit filed by the label's alleged co-founders.
The hearing was set to allow creditors to question Knight about his massive debt, which totals over $100 million.
Knight claimed he had nothing to do with the label while he was in jail and said he learned about the company's hardships through magazine articles.
Knight also said he had never seen a profit and loss statement but that he had reviewed income tax returns.
Bankruptcy documents filed on April 20 showed Knight earned no income this year from employment or operation of a business.
According to the records, his only assets include a bank account containing $11, clothing worth $1,000, furniture and appliances valued at $2,000, and jewelry worth $25,000.
Knight owns publishing/copyrights worth $4.4 million. However, the Internal Revenue Service had placed a lien on that intellectual property to cover back taxes of $11.3 million, the records showed.
Knight denied having secret funds in foreign countries, including an African company dealing with diamonds and gold.
"The office wasn't there, but we had to finish our obligations. Many projects that were started before that had to be finished," Knight stated. "Some of that work might have been done with a $500,000 payment received earlier this year from a music distributor."
Knight said he plans on reactivating Death Row at some point in the future.
Knight filed for bankruptcy protection April 4 to avoid the court appointing someone to take control of Death Row and his assets.
The federal filing halted the state court action in which Michael Harris and his ex-wife Lydia are set to collect a $107 million judgment from Knight for assisting in the founding of Death Row.
Michael, 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.
On Friday, Knight testified that he had previously reached an agreement with Lydia.
"I settled for a million and signed off on it," said Knight. "She got it and she spent it," Knight told reporters.
Lydia contends that she received the $1 million but never settled with Knight.
"I didn't do a settlement for $1 million. That's ridiculous. Let's keep it real," she said.
The proceedings are set to resume on June 23.