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When Michael Jackson died on June 25, 2009, he was more than $500 million in debt, according to court documents filed last week in Los Angeles.
Jackson died at the age of 50 while preparing for his extended “This Is It” residency at the 02 Arena in London, which was scheduled to run from July 2009 to March 2010.
“At the time of Michael Jackson’s death, Michael Jackson’s most significant assets were subject to debts and creditor claims in excess of $500 million, with some debts accruing interest at very high rates of interest, and some debts in default,” the filing states.
The Los Angeles Times reported that certified public accountant William R. Ackerman, who testified as a defense witness on behalf of AEG Live in the August 2013 manslaughter trial, told jurors that Jackson spent the money on charitable donations, gifts, travel, art and furniture.
“He spent a lot of money on jewelry, and he was exhausted,” Ackerman said.
After Jackson’s death, financial responsibility for his planned tour in London fell to the estate. He owed about $40 million to concert promoter AEG, according to his last will and testament petition, “W [there was] Little hope of generating income from [Jackson’s] Assets that are already highly leveraged.
In a filing in March 2024, the estate’s executors claimed the estate was heavily in debt and on the verge of bankruptcy when Jackson died.
The property is now valued at more than $2 billion, thanks to some debt renegotiations and some asset sales.
Jackson had “more than six pending lawsuits worldwide” and more than “65 claims were filed by creditors on the estate, resulting in additional lawsuits, several of which resulted in a lawsuit,” the petition said. After his death, the executors’ attorneys handled 15 lawsuits in the United States and assisted with more lawsuits in Europe and Japan, most of which they claim were resolved or favorably disposed of.
The petition continues:
“The executors were able to renegotiate and restructure the financing arrangements that were in place at the time of Michael’s death, at significantly reduced interest rates, enabling the estate to avoid losing any assets to lenders and ultimately meet the burdens that were in place at the time of Michael’s death.
The renegotiations included debts secured by Jackson’s Mijac Music catalog (over $70 million at the time of his death), the estate’s stake in Sony/ATV3, and the mortgage on the Hayvenhurst estate and the Lindley Avenue apartment complex.
“Although the executors have eliminated the estate’s debts, resolved nearly all creditor claims and lawsuits, and have successfully established MJJ’s business as a significant entity in the music industry, there remain difficult business, tax, and legal issues that the executors face and their attorneys continue to address.”
The filing also indicates a pending final decision on victory in a 2021 court battle with the IRS.
