The executors of the late star’s now $2 billion estate have filed a petition for back pay from 2018.
When Michael Jackson passed away on June 25, 2009, at the age of 50 due to cardiac arrest in Los Angeles, he was over $500 million in debt, according to recent court documents.
The night before his death, the King of Pop had rehearsed for six hours at the Staples Center in Los Angeles, preparing for his comeback tour at the 02 Arena in London. Despite his efforts to relaunch his career by writing new songs and perfecting his performance, Jackson had significant financial difficulties.
Jackson’s spending habits were extravagant, leading to a hefty annual debt of $30 million, as reported by the Los Angeles Times. His expenses included donations to charity, luxurious gifts, extensive travel, and expensive art and furniture.
By 1998, Jackson’s debt had reached $140 million and continued to grow to about $170 million more by 2009. His loans accumulated interest ranging from just under 7% to 16.8% annually.
Jackson used his ownership in a song catalog, including Beatles hits, as collateral for loans amounting to $270 million from Bank of America. These loans were later sold to Fortress Investment Group in 2005.
Randy Phillips, former CEO of AEG Live, mentioned that Jackson was determined to rebuild his finances. Despite being seen as fragile and manipulated, Jackson was a powerful marketer and wanted to stop living extravagantly and start earning again.
After Jackson’s death, the estate faced financial burdens, including a $40 million debt to concert promoter AEG. The estate also dealt with numerous lawsuits and creditor claims.
The executors successfully renegotiated and restructured existing loans at reduced interest rates, avoiding the loss of assets. They managed to settle many of Jackson’s debts, including over $70 million secured by his music catalog Mijac Music.
In 2012, negotiations with Sony provided the estate with an interest in EMI Music Publishing, and by 2018, the estate sold this interest to Sony for approximately $300 million — a substantial return on the estate’s initial investment.
The probate court continues to oversee the estate’s finances, ensuring that Jackson’s three children, Paris, Prince, and Bigi, who benefit from the estate, are taken care of. Legal fees for managing the estate continue to accrue, with attorneys requesting over $3.5 million from 2018 alone.
Despite resolving most financial issues, the estate still faces challenges, including a recent legal battle involving allegations of sexual abuse by Wade Robson and James Safechuck. These cases, stemming from the HBO documentary Leaving Neverland, accuse Jackson’s companies of being complicit in alleged abuse.
Robson and Safechuck’s claims describe how Jackson’s staff allegedly enabled his behavior and covered up abuse, with evidence suggesting polices that allowed Jackson to be alone with children.
The estate denies these allegations staunchly, maintaining confidence in Jackson’s innocence and continuing to fight these claims in court.
Even after his death, Michael Jackson’s legacy and the controversies surrounding him continue to make headlines. Those handling his estate have worked tirelessly to clear his debts and maintain his business prowess in the music industry.
