Yahoo Finance Michael Jackson Was More Than $500M In Debt When He Died
When Michael Jackson died on June 25, 2009, he was more than $500 million in debt, according to court documents filed last week in Los Angeles.
Jackson died at 50 while preparing for his extended “This Is It” residency at the 02 Arena in London, which was scheduled to run from July 2009 to March 2010.
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“At the time of Michael Jackson’s death, Michael Jackson’s most significant assets were subject to more than $500 million of debt and creditors’ claims, with some of the debt accruing interest at extremely high interest rates, and some debt in default,” the filing said.
The Los Angeles Times reported that certified public accountant William R. Ackerman, testifying as a defense witness on behalf of AEG Live in a wrongful-death trial in August 2013, told jurors that Jackson spent money on donations to charity, gifts, travel, art and furniture.
“He spent a lot of money on jewelry,” said Ackerman. “He was tapped out.”
After Jackson’s death, the financial liability for his planned London tour fell on the estate. He owed roughly $40 million to concert promoter AEG, according to a recent probate petition, “and [there was] little hope of generating income from [Jackson’s] already highly leveraged assets.”
Estate executors claimed in a March 2024 filing that the estate was saddled with debt and on the verge of bankruptcy when Jackson died.
The estate now is valued at over $2 billion, thanks to some renegotiations of debt and some asset sales.
Jackson had “more than half a dozen lawsuits pending worldwide” and more than “65 creditors’ claims were filed in the Estate spawning additional lawsuits, of which several resulted in litigation,” the petition reads. After his death, attorneys for the executors handled 15 lawsuits in the U.S. and assisted with more in Europe and Japan, most of which they claim were resolved or disposed of favorably.
The petition continues:
“The Executors were able to renegotiate and restructure financing arrangements that existed at the time of Michael’s death, at substantially reduced interest rates, enabling the Estate to avoid the loss of any assets to the lenders and ultimately to satisfy the encumbrances that existed at the time of Michael’s death.
“The renegotiations included the debt secured by Jackson’s catalog Mijac Music (more than $70 million as of the date of his death), the estate’s interest in Sony/ATV3, and the mortgage on his Hayvenhurst estate and Lindley Avenue condominium.
“Although the Executors have eliminated the Estate’s debt, have resolved virtually all of the creditors’ claims and litigation, and have successfully solidified the MJJ business as a significant entity in the music industry, there remain challenging business, tax and legal issues that the Executors and their counsel continue to deal with.”
The filing also notes a pending final decision on a victory in a 2021 court battle with the IRS.
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