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Backstreet Boys Settle Bankruptcy Claims

October 30, 2014

The Backstreet Boys, the best-selling boy band in history, recently settled their claims against their creator, Lou Pearlman, according to news reports. Perlman, also the creator of other successful boy bands such as N’Sync, is currently serving a 25 year prison sentence after pleading guilty to conspiracy, money laundering, and making false statements during a bankruptcy proceeding.

After Pearlman filed bankruptcy in 2007, the Backstreet Boys (A. J. McLean, Howie Dorough, Nick Carter, Kevin Richardson, and Brian Littrell) filed claims that Pearlman and his Trans Continental Records owed them $3.5 million. The bankruptcy trustee challenged those claims and this year a federal bankruptcy judge ordered the band and trustee to work things out. Under an agreed settlement, the Backstreet Boys will receive $99,000 on account of their claims and take possession of the rights to master recordings, including the hit, “”I’ll Never Break Your Heart.”

Last fall, the bankruptcy judge approved Pearlman’s plan to pay creditors, including a provision to pay general unsecured creditors (including the Backstreet Boys) about four cents of each dollar they’re owed. Since that time, payments have been mailed to creditors. The good news for the band is that Backstreet got some of their money back – all right!


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