May 11 (Bloomberg) -- Pop star Michael Jackson averted foreclosure of his Neverland Ranch because Colony Capital LLC bought the loan on the property.

Colony, the Los Angeles-based private equity firm headed by Thomas Barrack, purchased the loan from Fortress Investment Group LLC and is in discussions with Jackson, according to a statement on Business Wire and verified by spokesman B. Michael.

``I am pleased with recent developments involving Neverland Ranch and am in discussions with Colony and Tom Barrack with regard to the ranch and other matters that would allow me to focus on the future,'' Jackson said in a statement.

Jackson, 49, has been struggling with debts that mounted as he fought charges that he molested a 13-year-old boy in 2003 and held him captive at the ranch, which is northwest of Santa Barbara, California. Jackson was cleared of all the charges by a jury in 2005.

The loan on the 2,900-acre ranch is about $23.5 million. The property was scheduled to be auctioned off on May 14, but canceled on May 9, Fox News reported that day.

Colony spokeswoman Caroline Luz declined to comment. Lilly Donohue, a spokeswoman for New York-based Fortress, didn't immediately return a message left at her office today.

Colony has invested more than $36 billion in real-estate related assets since its founding in 1991. The firm participated in a $5.4 billion management buyout of Station Casinos Inc., owner of 12 Las Vegas-area casinos, last year. Together with Bernard Arnault, France's richest man, Colony owns more than 10 percent of Paris-based Carrefour SA, the world's second-largest retailer.

Jackson is known as the ``King of Pop'' for hits including ``Billie Jean'' and ``Thriller.'' He stocked the ranch with exotic animals and amusement-park rides and named it after the home of fictional character Peter Pan, a land where children never grow up.

To contact the reporters on this story: Jonathan Keehner in New York at jkeehner@bloomberg.netZachary R. Mider in New York at zmider1@bloomberg.net

Last Updated: May 11, 2008 16:24 EDT