Michael Jackson was more than $500 million in debt when he died

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When Michael Jackson died on June 25, 2009, he was more than $500 million in debt, according to court documents filed last week in Los Angeles.

Jackson died at the age of 50 while preparing for his extended “This Is It” residency at the 02 Arena in London, which was scheduled to run from July 2009 to March 2010.

“At the time of Michael Jackson’s death, Michael Jackson’s most significant assets were subject to debts and creditor claims in excess of $500 million, with some debts accruing interest at very high interest rates, and some distressed debts,” the filing states.

The Los Angeles Times reported that certified public accountant William R. Ackerman, who testified as a defense witness on behalf of AEG Live in the August 2013 manslaughter trial, told jurors that Jackson spent the money on charitable donations, gifts, travel, art and furniture.

“He spent a lot of money on jewelry, and he was exhausted,” Ackerman said.

After Jackson’s death, financial responsibility for his planned London tour fell to the estate. He owed about $40 million to concert promoter AEG, according to the last will and testament petition, “and [there was] Little hope of generating income from [Jackson’s] Already highly leveraged assets.

The estate’s executors claimed in a March 2024 filing that the estate was heavily in debt and on the verge of bankruptcy when Jackson died.

The property is now valued at more than $2 billion, thanks to some debt renegotiations and some asset sales.

Jackson had “more than a half-dozen lawsuits pending worldwide” and more than “65 creditor claims filed on the estate giving rise to additional lawsuits, many of which ended in litigation,” the petition said. After his death, executors’ attorneys handled 15 lawsuits in the United States and assisted with more in Europe and Japan, most of which they claim were resolved or favorably disposed of.

The petition continues:

“The executors were able to renegotiate and restructure the financing arrangements that existed at the time of Michael’s death, at significantly reduced interest rates, enabling the estate to avoid losing any assets to the lenders and ultimately meet the encumbrances that existed at the time of Michael’s death.

The renegotiations included debts secured by Jackson’s Mijac Music catalog (over $70 million at the time of his death), the estate’s stake in Sony/ATV3, and the mortgage on the Hayvenhurst estate and the Lindley Avenue apartment complex.

“Although the executors have eliminated the estate’s debts, resolved virtually all creditor claims and lawsuits, and successfully established MJJ’s business as a significant entity in the music industry, there are still challenging business, tax, and legal issues that the executors and their attorneys continue to address.”

The filing also indicates a pending final decision on victory in a 2021 court battle with the IRS.