Michael Jackson Faced Over $500 Million Worth Of Debt At Time Of Death, Filings Show

Recent court filings reveal that the estate of pop legend Michael Jackson was in debt to the tune of over $500 million at the time of his death in 2009.

What Happened: Documents filed in Los Angeles on June 21 and later obtained by People magazine last week showed that Jackson owed this massive sum to more than 65 creditors. The filings also disclosed that the late singer had multiple lawsuits pending worldwide.

The executors of Jackson’s estate renegotiated and restructured financing arrangements to manage the debts. This included a $750 million deal with Sony over music publishing rights for several artists, which allowed Sony to acquire Sony/ATV. According to People, despite these efforts, the estate still owes a significant amount of money.

The documents also indicate a pending final decision on a victory in a 2021 court battle with the IRS. Jackson's three children, the beneficiaries of his estate, are currently blocked from receiving money from their trust until the IRS dispute is resolved.

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In February, Sony Music reportedly purchased Jackson's music catalog for at least $600 million, injecting more funds into the estate. The Los Angeles Times previously reported that Jackson’s excessive spending habits largely contributed to his significant debt.

Why It Matters: The Jackson estate’s financial woes are a stark reminder of the late pop star’s tumultuous financial history. Despite his immense success and earnings, Jackson’s lavish lifestyle and spending habits led to mounting debts, which his estate has been grappling with since his death.

The estate’s efforts to manage these debts, including the $750 million deal with Sony, have been significant. However, the ongoing legal battles and unresolved IRS issues continue to hamper the estate’s ability to clear the debts and distribute the inheritance to Jackson’s children.

The purchase of Jackson’s music catalog by Sony Music provided a much-needed financial boost to the estate. Still, it remains to be seen how the estate will navigate the remaining financial challenges and fulfill its obligations to the creditors and beneficiaries.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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