If he was innocent, why did he settle out of court in 1993?

In short: he had no choice in the matter.
This was a decision carried out by his insurance company in light of the fact that, as one of the most famous people on the planet, his ability to maintain income depended completely on his public image. As we came to see in 2005 when the second set of allegations rolled around, the choice to take this to court would have had a catastrophic impact on his career and financial well-being. 
Regardless of the outcome, Jackson’s career and good name never fully recovered from the 2005 trial.

Settling this suit was in no way an admission of guilt on the behalf of Michael Jackson, who always maintained his innocence.

A direct quote from the settlement:

Jackson specifically disclaims any liability to, and denies any wrongful acts against, the Minor [Jordan Chandler], [Evan Chandler] or [June Chandler] or any other persons. The Parties acknowledge that Jackson is a public figure and that his name, image and likeness have commercial value and are an important element of his earning capacity. The Parties acknowledge that Jackson claims that he has elected to settle the claims in the Action in view of the impact the Action has had and could have in the future on his earnings and potential income.

The Parties recognize that the Settlement Payment are in settlement of claims by [Jordan Chandler], [Evan Chandler] and [June Chandler] for alleged compensatory damages for alleged personal injuries arising out of claims of negligence and not for claims of intentional or wrongful acts of sexual molestation”.

Jackson did not agree to pay on any charge of molestation or abuse. The only charge left standing was “Negligence”, which of course was withdrawn upon payment. No insurance company can pay off a crime you’ve committed, but they can pay off a negligent act you’ve committed (a restaurant whose slippery floors cause injury of a customer could be considered “negligence”, for example, and would be covered under the company’s insurance).

Bear in mind that this was a settlement of a CIVIL LAWSUIT only, not a CRIMINAL one. No amount of money can make criminal charges disappear. This was a lawsuit that was completely separate from the criminal investigation that was being launched against Jackson. The absolute purpose of this type of civil lawsuit is MONETARY GAIN, not criminal justice. From this point on, the Chandler family had the option to carry this over to criminal court  and bring their child’s alleged “abuser” to justice. 
This never happened. Why not? Because they got what they wanted in the first place - a fat sum. 

The commonly thrown about idea that this settlement was “hush money” is absolutely wrong. Jordan Chandler was given ample time and plenty of opportunity (including during the 2000s trial) to come forward and testify in court against Michael, and never did. “Hush money” would imply a sum paid in exchange for total silence. There was never any such agreement or expectation.

To sum that up:

  • Jackson’s insurance company was solely responsible for the decision to settle
  • It is not possible to settle criminal charges with money. The criminal charges were dropped independently of this settlement - because there was simply nothing to convict
  • The Chandlers had the opportunity to obtain both money AND justice for their child’s “abuser”. They chose the money alone.
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