Michael Jackson Was Over $500 Million in Debt at Time of Death, New Court Documents Reveal

Michael Jackson, the legendary King of Pop, was more than $500 million in debt at the time of his death in 2009, according to recently filed court documents. This revelation sheds light on the financial turmoil Jackson faced despite his immense popularity and success.

Debt and Financial Struggles

When Jackson died on June 25, 2009, from apparent cardiac arrest in Los Angeles at age 50, he owed money to over 65 creditors. The night before his death, Jackson had performed a six-hour dress rehearsal at the Staples Center in Los Angeles for his planned This Is It residency at the O2 Arena in London. Despite his efforts to stage a comeback, Jackson’s extravagant spending habits left him in dire financial straits.

Exorbitant Spending

According to the Los Angeles Times, Jackson’s spending included donations to charity, gifts, travel, art, and furniture, as well as significant expenditures on jewelry. Public accountant William R. Ackerman testified in 2013 that Jackson’s debt had been mounting since 1993 and had reached $140 million by 1998. From June 2001 to June 2009, his debt increased by an additional $170 million. Interest on his loans ranged from just under 7% to as high as 16.8% annually.

Collateral and Loans

To manage his financial obligations, Jackson used his stake in a song catalog that included Beatles hits as collateral for about $270 million in loans from Bank of America. These loans were later sold to Fortress Investment Group in 2005.

Efforts to Clean Up Finances

Randy Phillips, the former CEO of AEG Live, mentioned in a 2009 Rolling Stone interview that Jackson wanted to clean up his finances and stop living like a vagabond. Despite Jackson’s intentions, the financial liability for the massive tour fell on his estate after his death. At that time, Jackson owed approximately $40 million to concert promoter AEG.

Estate Management and Legal Battles

Estate executors John Branca and John McClain, along with their legal counsel, have worked tirelessly to manage and resolve Jackson’s debts. In a recent probate petition, they detailed efforts to renegotiate financing arrangements, avoiding the loss of assets to lenders. The estate, once valued at over $2 billion, faced numerous lawsuits and claims from over 65 creditors.

In 2012, negotiations with Sony resulted in the estate acquiring an interest in EMI Music Publishing, which was later sold for approximately $300 million. Despite eliminating the estate’s debt and resolving most litigation, ongoing legal challenges, including a 2021 court battle with the IRS, continue to pose difficulties.

Legal Battle with Accusers

One notable legal battle involves allegations by Wade Robson and James Safechuck, who claimed in the HBO documentary Leaving Neverland that Jackson sexually abused them as children. In August 2023, they were granted a trial against Jackson’s companies, MJJ Productions and MJJ Ventures, now owned by the estate. The plaintiffs must prove that Jackson assaulted them and that his companies were complicit.

Conclusion

Michael Jackson’s financial and legal troubles have persisted long after his death, highlighting the complexities of managing the legacy of one of the most iconic figures in music history. As his estate continues to navigate these challenges, the revelations about his financial state provide a deeper understanding of the pressures Jackson faced during his life.