Fortune squandered

Jackson had 500 million dollars in debt before his death

Michael Jackson is said to have been 500 million dollars in debt before his death.

(Bild: 2005 Getty Images)

15 years ago, the world mourned the death of Michael Jackson after the music legend died at the age of 50 from a cardiac arrest caused by a drug overdose. Court documents published by "People" magazine now show just how badly off the "King of Pop" was financially at the time.

According to the documents, the King of Pop had debts of over 500 million dollars at the time of his death on June 25, 2009.

The night before his death, Jacko had rehearsed for six hours for his new comeback tour. This was due to begin in London in July and last until March 2010. Because the star urgently needed money.

Accumulated debts of 30 million dollars per year
According to the sworn testimony of accountant William R. Ackerman before the Los Angeles Superior Court, Jackson had accumulated 30 million dollars more in debt each year due to his exorbitant spending. Most of the money was spent on luxury travel, art and, above all, jewelry.

Michael Jackson squandered his fortune before his death.

(Bild: PHOTO PRESS SERVICE Vienna)

In 1993, Jackson had already spent more than he had earned for the first time. Just five years later, according to Ackerman, his debts already amounted to 140 million dollars. Between June 2001 and his death, Jackson wrote down a further 170 million dollars in bad debts. The total amount rose annually by up to 16.8 percent in interest on loans from Bank of America. The bank had lent the money to Jacko - who put up his Beatles songbook collection worth 270 million dollars as collateral (which he lost in 2005).

"On the brink of bankruptcy"
In March of this year, the executors John Branca and John McClain confirmed in court documents that Jackson was "on the verge of bankruptcy" in 2009. Half a dozen lawsuits for damages were pending against him. After Michael's death, "65 creditors in the US, Europe and Japan" went to court and demanded their money back. Except that there wasn't enough and the executors slowly regained the upper hand over the debts "through years of negotiations and debt restructuring".

In order to reduce the debt burden, Michael Jackson's song catalog, which was worth 70 million dollars in 2009, had to be used as collateral. To this end, a mortgage was taken out on the family home in the Los Angeles suburb of Encino and another luxury apartment. In return, the executors acquired the music rights to Motown artists from EMI Music Publishing for 50,000 dollars.

Sony paid the Jacksons 300 million for these in 2018. In addition, the value of Jackson's song catalog has skyrocketed and he is no longer in the red due to interest, as all debts have been paid off.

Estate now worth two billion dollars
According to court documents, the value of Jackson's estate has now skyrocketed to two billion dollars - up from half a billion minus 15 years ago. The beneficiaries are Jackson's children Paris, Prince and Bigi, who have each inherited a third of the steadily increasing fortune.