Dollars & Sense
Big names, big debt - Stars with money woes
If you're feeling alone and depressed because you have problems with debt, cheer up -- you're in the company of the (fleetingly) rich and (mostly) famous.
That can be the company of billionaires, as in Donald Trump and Michael Jackson, to start at the top of the A-list.
The Donald isn't hurting too much right now, but a decade ago, Trump was on the brink of going spectacularly bust. His personal liabilities were around $900 million. His three casinos and posh Plaza Hotel were forced into bankruptcy, he lost his yacht and the Trump Shuttle, and Ivana snagged the mansion and $14 million in the divorce.
Happily, Dealmeister Donald says he's now fine, he has a $2.5 billion fortune - although his company still has $1.8 billion in debts and his casinos lost tens of millions in 2003. It's all a question of scale.
For Michael Jackson, though, it looks like Pop goes the King.
Jacko's chained to a $200 million millstone of debt, says a California lawsuit, and he's reportedly trying to stave off bankruptcy, scraping by on a million bucks a month.
Michael's meltdown started to show when his parents, Joe and Katherine, filed for bankruptcy, claiming debts of $45 million and assets of around $400,000.
The Jackson kids Tito, Jermaine, Randy and Rebbie also went bust, but Michael and his songbird sisters Janet and LaToya did nothing, saying they had no part of the family firm.
Others say the King of Pop couldn't help anyway. "Michael Jackson is a ticking financial time bomb, waiting to explode at any moment," says a lawsuit that seeks to freeze Jacko's Neverland assets.
The company behind the lawsuit says it arranged $230 million in loans for the singer between 1998 and 2000, and he owes them $12 million. The suit says he used much of the money to refinance earlier loans.
On top of his money woes, the singer faces molestation charges, his records aren't selling the way they used to, and he doesn't want to go home to his Neverland ranch since sheriffs 'violated' the place by searching it.
Jacko's solution: he's renting a 37,000 square-foot mansion and cliffside estate for $100,000 a month. If you're down and out in Beverly Hills, you can, it seems, still live well. Just sniff at the debts, and carry on.
Another musical genius, Wolfgang Amadeus Mozart -- arguably the most famous composer of all time -- fell heavily into debt in his early 30s and when he died at age 35, was buried in an unmarked pauper's grave.
He's one of a slew of stars that have struggled mightily with debt, including Lorraine Bracco of "The Sopranos," musician Elton John, actress Kim Basinger, boxer Mike Tyson, who went through $300 million living lavishly if not wisely, and an early president of the United States, Thomas Jefferson.
Then there's Martha. She's no president, but Martha Stewart is America's domestic queen, and she's also facing big money problems.
The distressed diva must feel she has a bull's-eye on her back. She dumped her ImClone stock the day before it tanked, leading to a federal investigation. If the courts decide she lied to them, she might find herself not only poor, but also behind bars.
Meanwhile, her Omnimedia company's share price has plummeted, costing her around $300 million.
Can't whitewash debts
In 1873, Samuel Clemens, better known as Mark Twain, built a large home in Hartford, Conn. He hired Associated Artists, run by famous jewelry-and-glass designer Louis Comfort Tiffany, to decorate the home's first floor. But Twain's financial difficulties from a number of failed investments forced him to move his family to Europe 17 years later.
By 1894, Clemens was effectively bankrupt. He began worldwide lectures in an attempt to pay off his creditors and three years later he succeeded by paying all his debts in full.
Actor Burt Reynolds, however, didn't seem to have the same drive to pay off his debts. Reynolds declared bankruptcy in 1996, citing more than $8 million in debts, yet hanging on to his $2.5 million estate Florida.
While addressing the Senate about the homestead amendment last year, Sen. Herb Kohl said Reynolds was one of many examples of "rich debtors taking advantage" of the system. Wonder what the Wisconsin Democrat would have said about fellow politician, third president of the United States and principal author of the Declaration of Independence, Thomas Jefferson?
Moving on down
Jefferson was no stranger to debt. When he left office in 1809, his wine bill alone exceeded $10,000. Add that to his 40-year project, Monticello, a lavish house that boasts 43 rooms and 13 skylights, and you'll understand why Jefferson ended up more than $107,000 in debt.
When he died in 1826, his large estate and all his possessions, including 130 slaves, were auctioned off to pay his creditors.
And then there's the other famous Jefferson.
Actor Sherman Hemsley, better know as George Jefferson from the CBS sitcom "The Jeffersons" which ran from 1975-85, filed for bankruptcy in 1999, owing, among other things, $15,500 in unpaid taxes.
Turning the television star debt dial to NBC, consider Gary Coleman, star of the 1978-86 sitcom "Diff'rent Strokes." Coleman estimates that he earned $18 million from the show, but says his parents and former manager squandered the money.
In an attempt to raise money in 1999, he sold some of his personal items in an online auction, including his size 4 Â½ bowling shoes and some Afro picks. On Aug. 18, 1999, he filed for bankruptcy.
You can't touch this debt
No tragic saga of child stars would be complete without mention of the two Coreys from the '80s -- Feldman and Haim. Presumably, they made money from the "Call the Coreys Hotline" (a 900 number fans would call and pay to hear messages from Corey and Corey) and their films, yet both Coreys ended up in debt by their 20s.
Haim, the star of 1987 teenage-vampire horror film "The Lost Boys," filed for bankruptcy in 1997 citing debts including nearly $104,000 to the IRS, $100,000 in state taxes and a variety of medical expenses.
While Feldman never declared bankruptcy, his mounting debt virtually destroyed his career.
Feldman, who had shown great promise as an actor in successful films including "Stand By Me" and "The Goonies," was cast down to the pit of flop films. "I had earned a million dollars by the time I was 13 or 14, he told Bankrate in 2002. "But when I went to my bank accounts to see what my parents had put away for my future, there was $40,000 left."
In a strange twist of fate, Feldman was married Oct. 30, 2002, to student Susie Sprague on the set of his new WB show, "Surreal Life," with fellow debtor MC Hammer, now an ordained minister, presiding over the marriage.
Rapper Hammer's 1990 release of "U Can't Touch This" made him a star. But his money was spent on racehorses, legal battles and an entourage described by VH1 as "sizeable enough to successfully invade Switzerland." In 1996, he declared bankruptcy.
Either Hammer doesn't learn from example, or he isn't a country music fan. He was probably too swept up in 1990 releasing "Please Hammer, Don't Hurt 'Em," to turn on the news and see what was happening to country music star Willie Nelson.
A tale of tacos, tapes and Texas
In November 1990, the IRS raided Nelson's home in Texas and seized everything -- including his 44-acre home, gold records and his children's bronzed baby shoes.
Nelson blamed his financial predicament on mismanagement of his funds by his accountant. However, his lavish spending might have been part of the problem.
This spending included a huge entourage with all expenses paid entirely by Nelson. On the payroll was Paul English, who became recognized in the "Guinness Book of World Records" as the world's highest-paid sideman drummer.
Texas Monthly reported that fans would stand outside concerts and ask, not for autographs, but for money for things like wheelchairs, iron lungs and funerals. Nelson's standard reply was reportedly "Will a personal check do?"
The IRS auctioned off Nelson's home and his property, though friends and fans bought most of his things and gave them back later.
Nelson released the mail-order album "The IRS tapes: Who Will Buy My Memories?" to help pay his taxes. Fans will remember this period as the Taco Bell years -- when Nelson lent his image to endorse of the fast food chain.
In 1993, Nelson settled the $16.7 million delinquent tax bill.
Despite Nelson's well-publicized example of what not to do, an ocean away, English rock star Elton John kept spending.
Yellow brick road of debt
Over a 20-month period between 1996 and 1997 Elton John spent $205,774 on flowers alone -- and that's just a smidgen of his spending.
In 1999, the BBC reported that John asked a merchant bank to help him borrow $40 million to pay off his debts. A year later he admitted running up debts more than $2 million a month. His spending sprees were reported to include purchases of classic cars, clothing and jewelry.
John claimed his former accounting firm, PricewaterhouseCoopers, misappropriated millions of dollars. He filed suit. But defense lawyers seemed to think John's money problems lay elsewhere.
"I'm not a nest-egg person," said John when defense lawyers questioned his spending habits. "I'm a single man. I like spending my money."
The London Court of Appeals shot down John's lawsuit. The suit cost him an additional $11.8 million in legal fees.
Hits, flops and contracts
A disagreement over the film "Boxing Helena" pushed actress Kim Basinger into bankruptcy in 1993. The film flopped and the lawsuit began. Main Line studio said Basinger agreed to star in the film but pulled out.
The court ruled Basinger violated a verbal agreement. She was ordered to pay $8.1 million. Five days later she filed for Chapter 11. Eventually, Basinger appealed the Main Line decision to the court and won.
While that contract caused turmoil in Basinger's life, a 1999 contract gave Lorraine Bracco a new start.
Bracco, better known as Tony Soprano's psychiatrist, Dr. Melfi, racked up over $2 million in legal fees during a six-year custody battle with actor Harvey Keitel over their daughter, Stella. Bracco declared bankruptcy in 1999.
But 1999 ended up as a good year for Bracco -- she was cast in the HBO hit series "The Sopranos."
"I was troubled with the separation from Harvey and I had two kids at home," she told Mervyn Rothstein of The New York Times. Bracco said "The Sopranos" was "a big turning point. It allowed me to put myself back on my feet."
Here's hoping everyone with debt problems will have the same luck.