10 Celebrities That Have Dealt With Debt
With the unemployment rate at its highest point in a decade and the dollar reaching a six year low, many people are warning Australians of tough times ahead. But instead of wallowing in doom and gloom, it can pay off to look at the other side of the coin.
In this case, what about thinking of all the people that have walked down struggle street and actually got to the other side? How has dealing with debt and other issues helped them?
It is not something people often think about unless they are facing a similar situation. But anyone can benefit from some financial inspiration, so we have decided to take a look at 10 celebrities that have faced debt and overcome it to get to where they are now.
1. Annie Leibovitz
Annie Leibovitz is an internationally acclaimed photographer who works with publications including Rolling Stone, Vanity Fair and the New York Times. Despite having taken some of the most iconic pop culture portraits in the world (think John Lennon and Yoko Ono, the Vanity Fair Hollywood Edition covers and pretty much every celebrity over the past 40 years or so), Leibovitz has had some tough times financially.
In February 2009, the New York based photographer borrowed US$15.5 million from Art Capital Group, a company that lends money to art owners, using several houses she owned and the rights to her photographs as collateral. But the loan didn’t do much good – by July the lender took legal action, claiming Leibovitz had reneged on part of the deal and suing her for US$24 million.
While Leibovitz has since entered into a debt agreement, downsized some of her houses and continues to bring in a seven-figure salary from Vanity Fair, along with successes from her own published books and exhibitions, it still took her a few years to get back on track.
2. Burt Reynolds
The star of classic films like Boogie Nights, The Longest Yard and Deliverance has been dealing with financial issues for decades. While the actor has adamantly told ET that he is “not broke”, his debts total over US$100,000 and have motivated him to auction off a wide range of movie memorabilia.
“I want everyone to know that contrary to what all the news outlets are saying, I am not broke,” he says in an exclusive interview with the publication.
“I have been dealing with a business dispute for many years as well as a divorce settlement. I am simply selling some of my memorabilia that I have enjoyed for so many years but do not have use nor room for them anymore.”
Reynolds has previously filed for bankruptcy and had threats of foreclosure on his home. His divorce negotiations with ex-wife Loni Anderson have also been going on for over 21 years, with the total debt owed to her said to be around US$159,000 thanks to cumulative interest over the years.
3. Gwyneth Paltrow (GOOP)
While the actress and much mocked lifestyle blogger herself is not technically in debt, her website GOOP is a financial disaster. In 2014, reports surfaced that the company was US$1.2 million in debt, after RadarOnline.com obtained copies of some of Paltrow and co’s corporate filings.
The ensuing analysis from RadarOnline.com revealed that GOOP had losses of over US$300,000 for two consecutive years (2011 and 2012), despite earning more than $1.5 million dollars annually. The debt came from expenses such as website and newsletter costs ($98,150 and $79,961 respectively), product costs worth $189,590 and “a whopping $1,564,995 in administrative expenses”.
“Chief among those “administrative expenses”,” RadarOnline.com says, “were Paltrow and CEO Sebastian Bishop’s “renumeration,” (sic) or salaries, for which the company allotted $587,653.25, a sizable increase from the previous year’s figure of $172,585, despite the company’s losses.”
“All told, the expenses swallowed up the entire $1.8 million profit for the year and then some, resulting in a loss of $39,823.”
While documents from 2013 and 2014 have not yet been uncovered, Gwyneth Paltrow’s financial situation is expected to get messier following her “conscious uncoupling” (aka divorce) from Chris Martin in 2013.
4. Lindsay Lohan
The notoriously out of control, former teen acting star has dealt with a wide range of serious debts over the years. For starters, LiLo hasn’t exactly done the right thing with her income: despite earning millions from her movies, in 2012 the US tax department (IRS) seized her bank accounts to try and secure money she owed.
Reports then revealed that she had unpaid federal taxes of $93,701.57 from 2009, $140,203.30 from 2010 and $56,717.90 from 2011. On top of this money, reports have alleged that Lindsay Lohan owes $300,000 in legal fees and $40,000 to a legal assistant, making her an even bigger target for gossip mags and entertainment news sources alike.
5. Nicholas Cage
The public may know him for his roles in films like Face/Off, Adaptation, National Treasure and Ghost Rider, but the US government knows him better for his massive tax debt.
In 2010 he told the press he owed $14 million in back taxes, and since then has been slowly chipping away at the debt. His biggest reported payment was $6.25 million in April 2012, followed by $600,000 around November of the same year.
So notorious is his debt in the US, that critics have suggested many of his latest films are just jobs he has taken to help pay off the debt.
6. MC Hammer
MC Hammer might tell clubsters everywhere that they “can’t touch this”, but unfortunately the mantra hasn’t been true for his money. In the 90s he racked up over $13 million in debt and eventually filed for bankruptcy in 1996.
Over the next 11 years, MC Hammer worked hard to rebuild his fortune, earning more than $7 million in 2007. But, as TMZ revealed in an exclusive report in 2014, the IRS has decided they “can touch this”, having demanding dues of $1.4 million for 2007, as well as another $1.4 million for delinquent taxes from 1996.
7. Michael Jackson
Michael Jackson may very well be the most famous pop star ever, but all of his success came at a high price (in more ways than one). When he passed away in 2009, Jackson had accrued an estimated $400 – $500 million in debt, despite nine-figure annual earnings.
According forensic accountant reports quoted in the media, Jackson started building up debt in 1993, when he owed around $30,000. By the time of his death, he was paying that much per year just to keep up with interest charges for his half a billion-dollar debts.
Since 2009, however, his estate has continued to earn over $100 million annually, and in 2012 Forbes reported that his debts would be cleared by the end of that year.
“It’s a major milestone for Michael Jackson’s growing postmortem business empire, especially considering where the estate began. After the singer’s death, it appeared that many of his assets were close to default, if not already there,” Zack O’Malley Greenburg writes.
“But a handful of deals—including a $60 million advance for the concert film This Is It and a $250 million record deal with Sony, the largest in history—gave the estate the steady cash flow needed to pay off creditors.”
8. Pamela Anderson
The former Baywatch star is another celebrity that has had to deal with tax debts. In 2011 Anderson was reported to owe a total of $371,514.65 in taxes, with both the IRS and the State of California chasing her for money owed.
Reports also show that she previously owed $1.7 million to the tax office in 2009 and made it onto California’s list of the “Top 500 Delinquent Tax Payers”. But the celebrity has actually spoken out about her debts and how she is dealing with them now.
As The Hollywood Reporter noted in 2013, Anderson has been unapologetic about “doing the global reality show circuit to tackle her debts”.
“I’m in over my head a lot. I take a lot of risks. I live beyond my means,” she admits.
But, hey, at least she is riding out the situation now.
9. Walt Disney
While the Disney name is known across generations, the man behind this empire initially had some financial hardships of his own. One of Disney’s main clients went bankrupt when he was just starting out as a cartoon creator, leading him to file for bankruptcy in 1920.
The next few years were a time of rebuilding for Walt Disney, and saw him found Disney with a loan from his family, under the banner of which he created the iconic Mickey Mouse in 1928. But as website USLegal.com notes, Disney had to take other financial risks even as his reputation grew.
“The second stumbling block for Walt Disney, in terms of money, came prior to the release of Snow White and the Seven Dwarfs. Disney ran into financial trouble midst the production of his first major film,” it says.
“In 1937, close to bankruptcy for a second time in his short career, Disney approached the bank for a loan to complete his film. This loan was agreed and Disney was able to fund his staff and studio through to full completion of one of the most notable film releases of all time.”
Walt Disney’s story of financial trouble could also be considered one of the most inspirational on this list, showing that sticking to what you love and believe in can pay off even when there are financial challenges along the way.
10. Wesley Snipes
Wesley Snipes has had a huge number of critical and commercially successful films, from Wildcats to Blade and Brooklyn’s Finest. But in 2010 he paid the ultimate price for tax evasion and was sent to a US federal prison.
As Reuters reported at the time, Snipes had not paid taxes for seven years and faced charges for “wilful failure to file tax returns”, eventually leading to a sentence of three years in prison.
“At his sentencing, prosecutors said Snipes, a resident of Windermere, Florida, had earned more than $38 million since 1999 but had filed no tax returns or paid any taxes through October 2006.”
Snipes was released from a Pennsylvania prison in April 2013, and judging from his IMDb profile, has been busy with acting work since then.
Although some of the 10 people on this list could seem pretty obvious (Lohan and Jackson, for example), others may come as a surprise. And even if they don’t, reading about their journeys shows that even if you make millions of dollars every year, you can still end up with serious debt problems. On the other hand, some of these people also show that you can make it out the other side of debt and even bankruptcy – and that holds true regardless of how many quid (yep, I went there) you have to your name.
Images (top to bottom): Annie Leibovitz, source: Robert Scoble/Wikimedia Commons; Burt Reynolds in 1991, source: Alan Light/Wikimedia Commons; Gwyneth Paltrow, source: Andrea Raffin/Wikimedia Commons; Lindsay Lohan (cropped), source: avrilllllla; Nicholas Cage, source: Wikimedia Commons; MC Hammer (cropped), source: Brian Solis; Michael Jackson, source: Wikimedia Commons; Pamela Anderson, source: Wikimedia Commons; Walt Disney screenshot; Wesley Snipes, source: Wikimedia Commons.