Michael Jackson Died With $500M In Debt, New Court Docs Reveal

Michael Jackson ran up a $500 million debt when he passed away in 2009, new court documents have revealed.

Bill Cobbs, Legendary Veteran Actor, Dead At 90

People shared court records filed in Los Angeles on Friday (June 21) by Jackson’s estate executors, detailing how he was drowning in more than half a billion dollars in debt. MJ’s “most significant assets” were hit with “debt and creditors’ claims, with some of the debt accruing interest at extremely high interest rates, and some debt in default,” the legal documents read. The global icon owed money to more than 65 creditors during the time of his passing.

According to the outlet, in March, two MJ estate executives, attorney John Branca, and A&R executive John McClain, claimed that the estate was on the verge of bankruptcy when Jackson passed away. Jackson’s estate has now filed a petition to be reimbursed for many expenses, including operational costs dating back to 2018.

Estate executors issued a missive to the court that they had fulfilled most of the creditor’s claims and resolved other legal-mandated actions. But years before these filings hit the court, a public accountant testified and spoke about MJ’s irresponsible spending habits contributing to the “King of Pop’s” crumbling finances.

Fat Joe Says Chris Brown Would Be Michael Jackson If It Weren't For This Incident

William Ackerman, an accountant representing AEG in 2013, testified that Jackson spent money on lavish jewelry, art, and gifts while using funds on charitable causes with no concern for his accruing debt. He was tapped out,” Ackerman testified, according to The Los Angeles Times . The accountant later stated that Jackson’s “largest expenditure was his interest expense. He spent a ton of money on interest.” To Ackerman’s point, Jackson’s biggest expense arrived in 2009 “[for] $30 million in annual payments on his debt.” The interest grew from “little less than 7% to 16.8% annually” in 2013, and is said to have accumulated even more interest in 2024.

Michael Jackson died on June 25, 2009, at age 50. His untimely demise arrived right before the pop star planned to hit the road for his This Is It tour. MJ’s death left his estate responsible for paying off the $40 million debt owed to AEG, who helped promote the This Is It tour.

Additionally, Jackson’s children and his mother, Katherine, were meant to be beneficiaries of his estate. However, the executors stated that the beneficiaries could not receive money from the estate due to unresolved disputes with the IRS stemming from a 2021 federal tax return, per People . The IRS asserted that the “estate undervalued its assets” and actually owed approximately $700 million in extra taxes and penalties.

Nia Long Speaks On Playing Katherine Jackson In 'Michael' Biopic: "I Was Scared To Death"