Michael Jackson’s $500 million debt revealed in new court documents
According to the court documents filed June 21 obtained by People Magazine, Michael Jackson had debts totaling more than $500 million when he died in 2009.
Before his death, the King of Pop had gone through a six-hour rehearsal at the Los Angeles Staples Center for his This Is It residency at London’s O2 Arena. This extended residency was part of his comeback plan, complete with new songs he had written as well as hours of rehearsals for the shows that were set to run from July 2009 to March 2010.
However, Jackson’s spending habits meant he needed money to pay off his debt of about $30 million annually, as reported by the Los Angeles Times. The Times also reported that certified public accountant William R. Ackerman who was testifying for AEG Live in the wrongful death trial in 2013 has also given a detailed look at the legendary singer’s finances. He told the jurors that Jackson spent his money donations to charity, as well as art, gifts, furniture and travel.
He added, “He was tapped out.”
Michael Jackson’s $500 million debt
By 1998, Jackson’s debt had reached $140 million. From 2001 to 2009, his debt had grown to $170 million. Ackerman also said that the interest on his loans had grown over the years from 7% to 16.8% yearly.
The New York Times also reported that Jackson used his stake in a song catalog, which included the Beatles’, as collateral for an approximately $270 million loan from Bank of America. For its part, the bank said that they had sold the loans to a company that buys distressed debt, Fortress Investment Group, in 2005.
Former CEO of AEG Live Randy Phillips told Rolling Stone in 2009, “He wanted people to see his work and not just talk about his lifestyle. Michael was a very smart marketing person. People say he was feeble and manipulated, but he was powerful and a manipulator. He was ready.”
“He wanted to clean up his finances. he was ready to stop living like a vagabond and settle down and earn money again,” he continued.
However, when Jackson died, his estate was still liable for the aborted tour. This meant owing AEG $40 million. The recent probate petition stated, “and [there was ] little hope of generating income from [Jackson’s] already highly leveraged assets.”
This March, his estate executors attorney John Branca and A&R executive John McClain, together with their attorneys, Jonathan Steinsapir and Saul Ewin, claimed that the $2 billion Jackson estate had mounting debts and was about to be bankrupt when the King of Pop died.
Will the Sony purchase be enough?
The claim further stated that Jackson had “more than a half a dozen lawsuits pending worldwide” and had over 65 creditors’s claims, some of which ended in litigation. After he died, his executors’ legal teams contended with 15 lawsuits in the US and assisted with more that were in Europe and Japan. Most of these were either resolved or disposed off favorably.
Currently, the efforts to renegotiate the estate’s finances include the debt that was secured by Jackson’s Mijac Music (valued over $70 million at his death), interest in Sony/ATV3 and the Hayvenhurt estate and Lindley Avenue condominium’s mortgage.
With the Sony negotiations in 2012, Jackson’s executors were able to get an interest in EMI Music Publishing. This owns the copyrights for Carole King, Norah Jones and the Motown classics’ songs). In 2018, Sony was able to get this interest for $300 million, which is more than 5,000% of the estate’s initial $50,000 investment.
The estate’s executors are now asking for more than $3.5 million in legal fees owed from six years ago, through this petition.
However, the most notable legal battle the Jackson estate is involved in comes from Michael Jackson’s accusers Wade Robson and James Safehuck, who ere given a trial in August 2023. They were the alleged victims who were in the four-hour HBO documentary Leaving Neverland.
Both claimed that Jackson sexually molested them when they were children. According to the court documents, MJJ Productions and MJJ Ventures, now part of the estate, will be facing a lower court jury. The Jackson estate has denied that Michael Jackson committed any wrongdoing.
It’s unknown if Sony’s most recent purchase of half the King of Pop’s catalog, valued at $1.2 billion, with the company paying $600 million, will be enough to settle Jackson’s debts.
The iconic singer’s upcoming biopic, Michael, is touted as Lionsgate’s biggest film to date. If it does well when it’s released April 18, 2025, it could also go a long way to help with paying the $500 million debt down.
The post Michael Jackson’s $500 million debt revealed in new court documents appeared first on ClutchPoints.
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