By: Jerry Zhang
When Michael Jackson passed away in 2009, it was revealed that he had amassed debts exceeding $500 million, largely due to high interest rates on several loans. This information emerged during a court filing by his estate, which provided details about the financial difficulties he faced in the later years of his life.
The case, originally filed in March 2024, eventually reached the California Supreme Court after making its way up the California judicial system. The purpose of this case was to authorize payments to several legal firms for their work in 2018 to help negotiate the sale of Michael Jackson’s stake in EMI Music Publishing to Sony. It also revealed that Jackson owed $40 million to tour promoter A.E.G. and that 65 creditors had made claims against his estate after his death, leading to several lawsuits.
When questioned by Reggie Ugwu, a New York Times correspondent, estate managers John Branca and John McClain declined to comment. However, in the court filing, the estate’s executors claimed to have eliminated Jackson’s debt and resolved nearly all claims and lawsuits.
In the 1980s and 1990s, Jackson raked in hundreds of millions of dollars and splurged lavishly. Known for his extravagant lifestyle, he amassed considerable debt due to his ownership of the extravagant Neverland Ranch, Jackson’s private home and amusement park located in California, and his penchant for pricey art, jewelry, and private jets. Spending well over $900 million on art alone.
During a 2013 wrongful-death trial, where A.E.G. was cleared of wrongdoing in Michael Jackson’s death caused by an overdose, according to a forensic accountant, Jackson was reportedly paying over $30 million annually in interest to creditors. Furthermore, Jackson bought the Beatles’ song catalog for $47.5 million in 1985, later selling it to Sony/ATV Music for a 50 percent share in the company who later bought back the shares for $750 million. Fittingly, he left behind a complex financial situation when he died at 50.
Although this situation is wrapping up, the Jackson estate is now tangled in a dispute with the IRS following a tax audit where the federal agency claims the estate undervalued its assets and demanded an additional $700 million in taxes and penalties.