Michael Jackson died deep in $500M debt, says court filings
Music legend Michael Jackson had a debt of over $500M at the time of his death in 2009, according to court documents filed in Los Angeles on June 21. The King of Pop reportedly owed this staggering amount to more than 65 creditors. Additionally, the documents mention that Jackson was facing "more than half a dozen lawsuits pending worldwide" and over "65 creditors' claims were filed in the estate spawning additional lawsuits, several of which resulted in litigation."
Jackson's estate executors restructured debts
Per the new filing, the executors of Jackson's estate "renegotiated and restructured" financing arrangements to address its debts. This included a $750M agreement with Sony that allowed the company to acquire Sony/ATV, which held rights to nearly 3M famous songs from artists like John Lennon, Paul McCartney, David Bowie, and Taylor Swift. Despite these settlements, the estate continues to grapple with substantial financial challenges, attributed to "challenging business, tax and legal issues that the executors continue to deal with."
Sony Music acquired Jackson's catalog, estate's value increased
In February, Sony Music reportedly purchased Jackson's music catalog for at least $600M—providing a financial boost to the estate. The LA Times reported that Jackson accumulated his massive debt largely due to his extravagant spending on charity donations, gifts, travel, art, and furniture. Despite these financial challenges and a $40M liability from his planned London tour falling on the estate after his death, it is now valued at over $2B due to debt renegotiations and asset sales.
Pop star's death left estate $40M in debt to AEG
The pop superstar had been preparing for a 50-show concert residency called This Is It at London's O2 Arena before his death on June 25, 2009, from cardiac arrest induced by the anesthetic propofol. Jackson's physician, Dr. Conrad Murray, was convicted of involuntary manslaughter in 2011 for administering the drug that led to the singer's death. According to filings, his death left his estate financially liable for $40M to the tour promoter, AEG.
Meanwhile, Jackson's children await IRS dispute resolution for trust money
Meanwhile, Jackson's three children—Prince, Paris, and Bigi—are beneficiaries of his estate but have been blocked from receiving money from their trust until the IRS dispute is settled. Court documents indicate that a tax audit determined the estate was "issued a note of deficiency" because it "undervalued its assets" and owed "$700M in taxes and penalties." A final decision on this matter, following a 2021 court battle with the IRS, is still pending.
