Michael Jackson was one of the greatest artistes ever to walk on this planet and many years after his death, the late iconic crooner is still considered as a legend. Michael Jackson, fondly known as MJ, was mired in several controversies at the time of his death in 2009.
A new report has suggested that the King of Pop was in massive debt at the time of his death. According to a report by NBC News, executors of the multiple award-winning singer filed a petition in the Los Angeles County Superior Court recently where they claimed that MJ was in a debt of more than $500 million.
This adds up to Rs 3700 crore approximately.
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What Did The Petition Say?
According to reports, the petition read, “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 shocking details come after it was reported that Jackson’s three children namely Paris, Prince, and Bigi and his mother, Katherine won’t receive money from Michael Jackson’s trust.
His family has been blocked from getting the funds until the dispute between his estate and the IRS (Internal Revenue Service) is resolved.
However, his family later in an official statement later revealed they were still receiving payments through an allowance. The statement read, “In annual reports provided to the probate court, which are publicly available, anyone can see that the Estate provides Michael’s mother and children with very substantial amounts of money to support them.”
The statement further shared, “The Estate has a very cooperative relationship with Michael’s children and whenever they need anything, the Estate works with them to ensure that they are very well taken care of, just as Michael would have wanted.”
Michael Jackson’s Financial Woes
The King of Pop, Michael Jackson, died in Los Angeles on June 25, 2009, at the age of 50, from what appeared to be a heart attack. But a startling revelation emerged in court filings dated June 21: Jackson owed more than $500 million when he passed away.
Jackson had been practicing for six hours at the Staples Centre in Los Angeles just the night before his tragic death. His highly awaited comeback tour, the This Is It residency at the O2 Arena in London, was the reason for this rigorous preparation.
The tour, which was slated to run from July 2009 to March 2010, was meant to be Jackson’s comeback to the limelight. He had spent endless hours honing his performances and writing new tunes.
The Los Angeles Times revealed that Jackson’s lavish lifestyle resulted in an annual debt rise of $30 million. In August of 2013, certified public accountant William R. Ackerman gave testimony in the wrongful-death case against AEG Live.
According to Ackerman’s evidence, “He bought a lot of jewellery.” Ackerman underscored the depth of Jackson’s financial incompetence when she said, “He was tapped out.”
Jackson’s financial troubles started in 1993, and by 1998, he owed an incredible $140 million. Between June 2001 and June 2009, there was an additional $170 million increase in his debt. Another major expense was the interest on Jackson’s loans, which ranged from less than 7% to as much as 16.8% a year.
Jackson attempted to control his growing debts by using his ownership of a significant music catalogue, which included hits by the Beatles, as security for loans totaling approximately $270 million from Bank of America.
In the end, Fortress Investment Group, a business that specialises in distressed debt, purchased this debt in 2005.
Even after Jackson’s death, there was still financial difficulty. His estate was left with a debt of approximately $40 million to concert promoter AEG as a result of the tour’s cancellation. The unpleasant fact was brought to light by the latest probate petition: Jackson’s assets were already severely leveraged, making it unlikely that he would be able to generate enough revenue to pay off his debts.
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