Michael Jackson was reportedly drowning in a mountain of debt when he died in 2009.
Court documents filed in Los Angeles on June 21 and obtained by People Thursday claim the King of Pop owed more than $500 million to more than 65 creditors just before he passed.
Jackson had “more than half a dozen lawsuits pending worldwide” and more than “65 creditors’ claims were filed in the estate spawning additional lawsuits, of which several resulted in litigation,” the petition states.
Michael Jackson reportedly owed more than $500 million before he died in 2009. Getty Images
The King of Pop reportedly had outstanding claims with more than 65 creditors. Getty Images
Per the new filing, Jackson’s executors were able to “renegotiate and restructure financing arrangements,” including a deal with Sony over rights he had to music publishing for several artists, at “substantially reduced interest rates” to avoid further losses and satisfy the debts.
The $750 million agreement allowed Sony to acquire Sony/ATV, which held the rights to almost 3 million famous songs from artists including John Lennon and Paul McCartney, David Bowie and Taylor Swift..
Despite settling those financial issues, Jackson’s estate reportedly still owes a significant amount of money as “there remain challenging business, tax and legal issues that the executors and their counsel continue to deal with,” according to the petition.
The filing reportedly also notes a pending final decision on a victory in a 2021 court battle with the IRS.
Jackson’s creditors were reportedly able to “renegotiate and restructure financing arrangements.” Getty Images
One of those settlements was a music publishing deal with Sony. AFP via Getty Images
Jackson’s three children, Prince, 27, Paris, 26, and Bigi Jackson, 22 — who are the beneficiaries of his estate — have been blocked from receiving money from their trust until the IRS dispute has been settled.
Court documents Page Six previously obtained showed that a tax audit determined the estate was “issued a note of deficiency” because it “undervalued its assets” and owed “$700 million in taxes and penalties.”
However, a spokesperson for the estate previously downplayed what appeared in the filing, telling us, “In annual reports provided to the probate court, which are publicly available, anyone can see that the estate provides Michael’s mother and children with very substantial amounts of money to support them.
Jackson’s three kids are the beneficiaries of his estate. Getty Images
Prince, Paris and Bigi Jackson have been blocked from receiving money have been blocked from their trust until the IRS dispute has been settled, though. Alan Chapman/Dave Benett/Getty Images
“The estate has a very cooperative relationship with Michael’s children and whenever they need anything, the estate works with them to ensure that they are very well taken care of, just as Michael would have wanted.”
In February, Sony Music put even more money back into the estate by reportedly buying the music superstar’s music catalog — which includes hits like “Beat It” and “Billie Jean” — for at least $600 million.
The Los Angeles Times previously reported that Michael accrued so much debt largely in part because of his excessive spending habits.
Michael’s spending habits were reportedly to blame for his financial issues. Getty Images
He reportedly spent a lot of money on charity donations, gifts, travel, art and furniture. WireImage
Accountant William R. Ackerman reportedly testified in the “Smooth Criminal” singer’s wrongful death trial in 2013 that the latter dropped a lot of money on charity donations, gifts, travel, art and furniture.
Michael’s spending habits were put on display during his 2003 interview with Martin Bashir, in which he went on a shopping spree at an antique store in Las Vegas.
In March 2005, just three months before he died, prosecutors in his sex abuse trial dubbed him a “shopaholic” who was on the brink of bankruptcy.
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