In a shocking revelation that came to light following the death of the iconic Michael Jackson on June 25, 2009, court documents recently released in Los Angeles detail an astronomical debt in excess of $500 million that weighed on the artist’s estate. Jackson, who passed away at age 50 while preparing for his “This Is It” concert series at London’s O2 Arena, was deeply in debt, with some of that debt carrying exorbitant interest rates and others already in default.
According to the Los Angeles Times, certified accountant William R. Ackerman, testifying in defense of AEG Live during a wrongful death trial in August 2013, highlighted Jackson’s extravagant spending habits, including charitable donations, gifts, travel, art and furniture. “He spent a lot of money on jewelry,” Ackerman said. “He was without resources.”
After Jackson’s death, financial responsibility for his planned London tour fell to the estate. He owed around 40 million to concert promoter AEG, as detailed in a recent probate petition. At the time of the singer’s death, the estate was on the verge of bankruptcy.
However, today Jackson’s assets are valued at more than 2 billion dollars, thanks to the renegotiation of debts and the sale of some assets. Jackson faced more than half a dozen lawsuits around the world and more than 65 creditor claims were filed, sparking additional litigation. However, the estate’s executors were able to renegotiate and restructure financial arrangements in place at the time of Jackson’s death at significantly reduced interest rates.
The renegotiations involved the debt secured by the Mijac Music music catalog (more than 70 million at the time of his death), the estate’s interest in Sony/ATV and the mortgages on his Hayvenhurst property and the Lindley Avenue condominium. Thanks to these efforts, the executors not only eliminated debt from the estate, but also resolved nearly all creditor claims and litigation, significantly solidifying the MJJ business as an influential entity in the music industry.
Still, there remain complex business, tax and legal challenges that executors and their lawyers continue to face, including a pending final ruling on a victory in a court battle against the IRS in 2021.
This case exemplifies not only the tumultuous financial reality that can hide behind the curtains of stardom, but also the resilient capacity for recovery and reinvention of the legacy left by cultural icons like Michael Jackson.
