By: Youheng Zhong

By the time legendary pop star Michael Jackson passed away in 2009 he had made hundreds of millions of dollars. He also had a lot of the opposite: debt. And it caught up to him after he died.

After Michael Jackson died, his debts and creditor claims totaled more than $500 million, according to a court filing. Of that $500 million, he owed $40 million to his tour promoter A.E.G. and even more to the 65 creditors who made claims against him after his death. On top of all that, his debt has been “accruing interest at extremely high interest rates” according to the same court filing.

A major reason Jackson accumulated so much debt was because he was a lavish spender. He often spent money on expensive art, jewelry, and private jets. Despite his massive wealth, Jackson paid over $30 million a year on interest payments for various loans and liabilities.

“He was tapped out,” said forensic accountant William Ackerman during his testimony.

In total, over 65 creditors made claims against Jackson’s estate after he passed away, leading to a flurry of lawsuits in the U.S. and abroad that the executors of his will had to sort out.

Fortunately, the executors of Jackson’s estate, John Branca and John McClain, were able to eliminate all of Jackson’s outstanding debts and resolve nearly all of the legal battles with his creditors. They did this by renegotiating financing arrangements and making major asset sales, including a $750 million deal with Sony to acquire Jackson’s stake in the Sony/ATV music catalog.

However, the estate is still facing one major unresolved issue – a dispute with the I.R.S. The tax agency has accused the estate of undervaluing its assets and says Jackson’s estate owes an additional $700 million in taxes and penalties. This lingering legal battle is preventing Jackson’s mother and children from receiving their full inheritance.