In June 2009, the globally renowned singer passed away, at the age of 50, due to cardiac arrest in Los Angeles, California.
Court documents, filed on June 21st, obtained by People, reveal that at the time of his death, Jackson was burdened with over half a billion dollars in debt, facing half a dozen lawsuits, and had 65 different creditors.
Jackson's financial troubles began well before his death. By 1993, he had accumulated $140 million in debt, which grew by an additional $170 million by June 2009.
According to the New York Times, Jackson used his stake in a song catalogue as collateral for approximately $270 million in loans from Bank of America.
Randy Phillips, former CEO of AEG Live, told Rolling Stone in 2009 that Jackson wanted the focus to be on his work rather than his lifestyle. He stated, “Michael was a very smart marketing person... He was ready to clean up his finances and stop living like a vagabond."
The massive debt reportedly stemmed partially from the singer's "exorbitant spending habits."
The Los Angeles Times reported in 2013 that Jackson's lavish lifestyle was leading to an annual debt increase of $30 million.
The publication reported that William R. Ackerman, testifying for AEG Live in the wrongful-death trial in August 2013, gave a detailed account of Jackson's finances. He mentioned that Jackson spent extensively on charity, gifts, travel, art, and furniture, telling the jury, "He spent a lot of money on jewellery. He was tapped out."
In a filing from March 2024, estate executors John Branca and John McClain said that, when Jackson died in 2009, the estate was saddled with debt and on the brink of bankruptcy.
The petition noted that Jackson had around half a dozen pending lawsuits and over 65 creditor claims, many of which had resulted in litigation.
The executors managed to renegotiate some financing arrangements for lower 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."
Renegotiations included the debt secured by Jackson’s music catalogue 'Mijac Music,' the estate's interest in Sony/ATV, and the mortgage on his Hayvenhurst estate and Lindley Avenue condominium.
From July to December 2018, several firms sought over $3.5 million in legal fees dating back six years via the petition.
"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 petition reads.
Read the full report from People HERE
