Famous Bankruptcies: It’s an “Honor”
As a Boston bankruptcy attorney, I represent folks throughout Massachusetts in Chapter 7 bankruptcy. We don’t have many clients who are famous, although all of our clients are important to us. Today’s blog is an outline of a few famous people who have filed for bankruptcy protection. Our point is that if they could do it when the time was necessary, then so can you. Some of these folks squandered their wealth, but I would note that many of these celebrities later became famous after getting a fresh start.
Oldies But Goodies
The Dutch painter Rembrandt lived beyond his means and filed for bankruptcy in 1656. His paintings (and house) were sold at auction and have become some of the most treasured art works in the world.
In 1833, Abraham Lincoln filed for bankruptcy when his small business failed in Illinois. Of course, he later became the US president at the most critical time in our history.
Mark Twain, widely considered to be the quintessential American novelist, filed for bankruptcy protection in 1984. Nevertheless, he toured Europe with remunerative speaking engagements and endeavored to pay back his creditors even after the debts were discharged!
John James Audubon filed for bankruptcy when he was 34 before he completed “The Birds of America” which is considered a classic by birders ever since. It was his daughter, Lucy, who founded the Audubon Society, in 1886.
In 1895, Oscar Wilde filed for bankruptcy, owing 3,581 pounds. His friends helped pay 20% of the debt and he was forced to give up first editions of his books, including his only novel, The Picture of Dorian Grey, where he wrote “Many people become bankrupt through having invested too heavily in the prose of life. To have ruined one’s self over poetry is an honor.” Walt Disney, believe it or not, filed for bankruptcy at age 21 when his Laugh O Gram Company failed.
We reported on Eagles quarterback Michael Vick’s bankruptcy back in August 2011.
An even bigger sports star, Mike Tyson, who had earned over $300 million filed for Chapter 11 bankruptcy in 2003, owing $27 million. He spent all of his money “extravagantly” which cost approximately $400,000 PER MONTH including buying pet Bengal tigers and funding a large entourage. He had been a world champion at the age of 20!
Baseball power hitter and American League MVP in 1988, Jose Canseco, lost his $2.5 million home (7,300 square foot California mansion) in a foreclosure in 2008. No bankruptcy was reported. His books reported on his steroid use and named names, including Mark McGwire, another home run record holder.
Leon Spinks, Lawrence Taylor Jonny Unitus and Bjorn Borg all filed for bankruptcy.
TV and Movie Stars
In 1971 and 1978, Larry King filed for bankruptcy. The CNN talk show host who interviewed more than 30,000 guests, was once $352,000 in debt and insolvent.
Kim Basinger filed for bankruptcy in 1993, apparently after investing $20 million in Braselton, a small town in Georgia. The venture was in partnership with the Ameritech Pension Fund. However, when she withdrew from the film, Boxing Helena, she was sued and lost $8.1 million. The bankruptcy clearly gave her a fresh start; in 1997 she won the Academy Award for L.A. Confidential.
Sherman Hemsley, also known as George Jefferson on “All in the Family” and “The Jeffersons,” filed for Chapter 13 in 1999. Apparently he owed $1,000,000 to a Los Vegas company and taxes to the IRS.
Steven Baldwin, who stared in movies such as The Usual Suspects and The Flintstones, filed for Chapter 11 bankruptcy in 2009. His debts were listed at over $2.3 million, including two mortgages and unpaid taxes.
Wayne Newton, who got his start in Miami Beach working for the Jackie Gleason Show, filed for Chapter 11 bankruptcy in 1992 when he owed $20 million for his liable lawsuit against NBC. He was sued in 2005 by the IRS for back taxes, and by Michigan officials for abandoning a plane and neglecting to pay $60,000 in storage fees.
Vince Neil, of the Motley Crue, was sued for $16,000 by his own lawyer, and filed bankruptcy in 2010.
M.C. Hammer, the rapper, filed for Chapter 11 bankruptcy in 1996, with $13.7 million in debt. One debt was for$110,000 to his interior decorator. He did list assets of $9.6 million.
A personal favorite of mine, Meatloaf, filed for bankruptcy in 1983.
Business Tycoons and other Favorites
Donald Trump’s hotels filed for a business Chapter 11 bankruptcy in 2004. And 2009!
Milton S. Hershey, who founded the Hershey Chocolate Company and Hershey, Pennsylvania, filed bankruptcy before he became famous.
P.T. Barnum, also before he became famous for founding The Greatest Show on Earth, filed for personal bankruptcy.
In 1988 Bud Post won $16.2 million in the lottery, overspent, and filed bankruptcy in 1996. He had purchased anything and everything the preverbal lottery winner would: tv’s bigger than himself, homes, cars, trucks, motorcycles and a boat.
Anna Nicole Smith, former stripper and clothing model, filed for bankruptcy in 1996, just three years after being named Playmate of the Year by Playboy. She had lost a sexual harassment suit to her former nanny, resulting in an $830,000 judgment. She was perhaps more famous for her marriage to J. Howard Marshall and for the lawsuit following her death involving her daughter’s inheritance.
John Wayne Bobbitt, who survived mutilation by his wife in 1993, subsequently filed personal bankruptcy.