Ten Famous Bankruptcy Filers
Believe it or not, the president who led the country through the civil war also had to declare bankruptcy at one point in his life.
Before taking office in 1861, Abraham Lincoln was a business owner and investor. In the book, The President and the Freedom Fighter by Brian Kilmeade, we learn that Lincoln was in his early 20s when he ran a small general store in Illinois. he owned and managed the store sometime around 1833.
Realizing the business was in a downward spiral financially, he opted to sell 50% of it. A willing investor bought half the business only to pass away, leaving future President Lincoln with 100% of the liabilities.
At the end of the 19th century, bankruptcy law was not as developed or as “friendly” as it is today. Back then, filing for bankruptcy did not offer a safety net, especially after creditors took borrowers to court.
Deprived of a penny of his business, abraham lincoln had his house seized along with other assets he owned. Although he managed to pay off his creditors, Lincoln’s experience with bankruptcy is a stark reminder that bankruptcy can happen to anyone.
2. mc hammer
“I can’t touch this!” …is probably what mc hammer told himself when he looked at the remaining $13 million of his fortune before filing for bankruptcy in 1996. at the height of his music career, mc hammer was reported to have amassed more than $30 million, according to the telegraph.
This may sound like a lot. however, as another famous musical adage says:
“easy comes, easy goes.”
In the few years he made his fortune selling millions of albums, he earned up to $70 million a year. with her albums selling like hotcakes, millions of dollars were to his name, at least until the early ’90s.
In the early ’90s, Mc Hammer embarked on a three-year spending spree that landed him in debt. while his music continued to sell and be popular, album sales alone were not enough to support his lifestyle.
In 1996, he was $13 million in debt. his situation forced him to sell everything he owned, including the house he spent millions of dollars renovating.
Nowadays, he has become wiser in his finances, being a minister and consultant to start-ups. today, he is proof that no one is “2 legit 2 quit” while on a spending binge.
3. walt disney
everyone knows walt disney as one of the pioneers of animated films. What most don’t discuss are the struggles the creator of Mickey Mouse had to go through on his way to fame and success.
In the years before 1922, Walt Disney was an animator in Kansas. he ran a small animation studio along with two other animators. the study was called laugh-o-gram. Based on a Forbes article, the laugh-o-gram was poised for success, catching the attention of many large companies in need of animated ads.
sadly, laugh-o-gram closed. Walt Disney was not generating enough revenue for its animation studio. part of the reason for this was that one of his dealers misled him.
left with nothing to pay his bills or creditors, walt disney had to file for bankruptcy in 1923. it was the swan song of an animation career that showed promise. Little did he know that bankruptcy would only be a bump in the road to fame and fortune.
Using money he borrowed from family and friends, he produced Snow White, the first animated feature film in history. Needless to say, the rest is history, paved by his other works like Mary Poppins and Cinderella.
the walt disney experience shows that it takes more than wishing on a star to get out of bankruptcy. it requires careful management of financial assets and knowing where to get financing.
4. nicolas cage
An acting career in Hollywood spanning decades might make you think Nicolas Cage lives the lifestyle of Troy Beaver. Instead, the air-conditioned and face-to-face star has had to dip into empty pockets thanks to a mega-lawsuit in 2009.
Nicolas Cage was one of the highest-grossing actors during the 1990s and early 2000s. His movies like Face Off, Ghost Rider and Con Air grossed millions of dollars at the box office, earning him up to $130 million.
the amount of money he made would make the circumstances surrounding losing it even more confusing than “the face change”. According to the Bible, Nicolas Cage was known for his strange spending habits, indulging in his fascination with expensive cars and dinosaur bones. he even did what many fantasize about doing with a large sum: buy an island.
His spending spree continued until he caught the attention of the IRS in 2008. In 2009, Nicholas was stuck with approximately $6 million in tax debt.
5. mike tyson
Mike Tyson’s boxing career was lucrative enough to earn him millions of dollars in one night. the money came from multiple sources, including pay-per-view revenue and ticket sales. he even made millions selling merchandise and a handful of television appearances.
fame and fortune did exactly what it does to many who try them: they encouraged spending. Mike Tyson spent fortunes on mansions, limos, designer clothes, and even exotic animals. It wasn’t long before alimony and divorce payments, his creditors and the IRS came knocking on his door.
Despite amassing roughly $400 million, almost all of his money was encumbered with debts and payments to his ex-wife, according to the new york times. This, along with millions of dollars in debt to the IRS, makes Mike Tyson one of the most famous bankruptcy filers on the list. the hard-hitting heavyweight boxing champion had to file for bankruptcy in 2003.
6. gary busey
time magazine lists gary busey as one of the most iconic american actors in history. Gary Busey had everything a director would want in an actor in America. busey had looks, skills and versatility. Shortly after a few blockbuster movies, Gary Busey picked up one more pervasive trait among Hollywood’s elites: poor money-handling skills.
in february 2012, gary busey shocked the headlines when he had to file chapter 7 bankruptcy. chapter 7 bankruptcy is when a person’s assets are not enough to pay the liabilities.
According to Time magazine, Busey had only $50,000 to his name, with over a million dollars in existing debts to various institutions. how he racked up so much debt is surrounded by much speculation.
what is certain is that he owed more than he could pay to ucla medical center, wells fargo and the irs. in short, owing more than he could pay, his fortune went up in “smoke”.
Meatloaf’s bankruptcy filing made headlines in 1983. Its bankruptcy was the result of more than just financial mismanagement. Going out of business was also the result of a lawsuit involving its songwriter, Jim Stenman. The songwriter sued Meatloaf to the tune of $80 million, claiming that Meatloaf violated music rights laws.
Bankruptcy, along with other problems, trapped the meatloaf. between 1982 and 1984, the musician lost his voice, which prevented him from making music. shortly after, he was diagnosed with cocaine addiction and major depression.
Bankruptcy and empty pockets made the singer want to do everything for something more than love. Due to debt, Meatloaf turned to small gigs to pay the bills, likely what she meant when she said “I won’t do that.”