Michael Jackson and Bankruptcy
Of all the news circulating this week in the aftermath of Michael Jackson’s untimely death, an article in the Wall Street Journal today caught my eye. The article discussed briefly the 1999 bankruptcy of Jackson’s parents, who had amassed an estimated $24 million dollars in debt and were forced into a Chapter 7. This is just a reminder of how even the most financially well-off amongst us sometimes need protection from a bankruptcy court. Chapter 7s are often thought of last resorts for people making under the state median income who are facing overwhelming obligations, but the Jackson family’s filing shows that even with income well above the state median, a Chapter 7 may be necessary, and doable.
Incidentally, the Los Angeles Times also reported back in March 2005 (link to story) that Jackson himself was on the “precipice” of bankruptcy during his child molestation trial with debts of $300 million and an additional $150 million in tax liabilities. According to some reports, Jackson was spending about $35 million per year while only bringing in $11 million.
The lesson: Jackson and his family were just ordinary folks with a few extra zeros added to their financial statements.