Laura J. Margulies
Bankruptcy Can Happen To Anyone – Bankruptcies Involving Famous People
By Laura J. Margulies
People facing financial difficulties often feel like they are the only ones having money troubles. They often feel embarrassed and isolated from the rest of the community. They are reluctant of file for bankruptcy because they are afraid they will be considered failures and irresponsible by the public. They do not realize that many people, including famous celebrities, have faced similar financial difficulties and filed for bankruptcy to discharge their debts. This article will discuss some of these famous people including artists, athletes, authors, actors and businessmen who filed for bankruptcy.
Rembrandt Haremenszoon Van Rijn, 1606-1669, the famous Dutch painter, accumulated more debts than he could repay and filed for bankruptcy at the age of 50 in 1656. Jacob Peter Thomasz, a lawyer, supervised the sale of his assets in 1657 and 1658. Many of Rembrandt’s paintings and his house were sold at an auction. After the bankruptcy, he continued to paint but was not allowed to fsell his works directly to customers. He was able to circumvent this law by having his son take over his business and sell his paintings.
Phineas Taylor Barnum, 1810-1891, the greatest American showman, filed for bankruptcy in 1871 due to losses he incurred in unwise business ventures. After bankruptcy he organized his famous circus, “The Greatest Show On Earth.” In 1881 he merged his circus with his most successful competitor, James A. Bailey, under the name of Barnum and Bailey Circus.
Mark Twain, (Samuel Langhorne Clemens), 1835-1910, pre-eminent American author, lost most of his money investing in a worthless machine called the Paige Compositor, an automatic typesetting machine. He filed for bankruptcy in 1894 and discharged all his debts, but was determined to repay the debts. He knew he could earn money by giving lectures to large audiences, so he traveled to Europe and spent the next four years lecturing in every major city. He used the proceeds from these lectures to repay all his debts. He also wrote several of
his more famous books after filing bankruptcy including Pudd’nhead Wilson andFollowing the Equator.
Mathew Brady, 1823-1896, distinguished Civil War photographer, filed for bankruptcy in 1872 in Washington, D.C. when, after the Civil War, people lost interest in his work and he became unable to pay his business fdebts. Three years after he filed for bankruptcy the United Stated War Department agreed to purchase part of his photography collection for $25,000.00. He then reopened his gallery and was successful in attracting new clients for his work.
Henry John Heinz, 1844-1919, condiment manufacturer, started his company in 1869 selling horseradish, pickles, sauerkraut and vinegar. In 1875 the company filed for bankruptcy due to an unexpected bumper harvest which the company could not keep up with and could not meet its payroll obligations. He immediately started a new company and introduced a new condiment, tomato ketchup to the market. This company was, and continues to be, very prosperous.
Oscar Wilde, 1854-1900, acclaimed poet and author, was forced into bankruptcy in 1895. He had earlier been convicted of homosexual activity, which in England was illegal at that time, and was sentenced to two years in prison at hard labor. He was declared a bankrupt on November 12, 1895 and his property was auctioned off. After being released from prison he published his poem, The Ballad of Reading Gaol. His health was affected by his prison experience and he died at the age of 46.
Milton Snavely Hershey, 1857-1945, founder of Hershey’s chocolate, started four candy companies that failed and filed bankruptcy before starting what is now Hershey’s Foods Corporation. Mr. Hershey had only a 4th grade education, but was certain he could make a good product that the public would want to purchase. His fifth attempt was clearly successful.
Henry Ford, 1863-1947, automobile manufacturer, first two automobile manufacturing companies failed. The first company filed for bankruptcy and the second ended because of a disagreement with his business partner. In June 1903, at the age of 40, he created a third company, the Ford Motor Company with a cash investment of $28,000.00. By July of 1903 the bank balance had dwindled to $223.65, but then Ford sold its first car, and as they say the rest is history.
Mickey Rooney, 1920- , movie actor, blames alcohol and gambling for the financial problems he suffered in the early 1960’s. He owed the Internal Revenue Service $1.75 million and filed for bankruptcy in 1962. After the bankruptcy he continued to act and has had many roles in movies and television. He is still performing live shows today.
Debbie Reynolds, 1932- , movie actress, purchased a hotel in Las Vegas in 1992 and called it the Debbie Reynolds Hotel and Casino. She thought she could operate the hotel successfully, however, it was plagued by a weak cash flow almost from the start. In July 1997 the hotel filed for Chapter 11 bankruptcy and Ms. Reynolds filed for personal bankruptcy. The hotel was sold at auction in 1998 to the World Wrestling Federation.
Johnny Unitas, 1933-2002 , legendary Hall of Fame football quarterback, was a great athlete but a terrible businessman. Each of his business ventures, including bowling alleys, land deals and restaurants, was unsuccessful. He filed for Chapter 11 bankruptcy in 1991. Other football players who filed for bankruptcy include Tony Martin and Lawrence Taylor.
Jerry Lee Lewis, 1935- , famous Rock n’ Roll star, filed for bankruptcy in 1988 because of huge tax debts. The IRS seized his cars, furniture, baby grand piano and even showed up at his concerts to collect ticket sales. He has since recovered from bankruptcy and still gives live concerts.
Burt Reynolds, 1936- , movie actor, filed for bankruptcy in 1996 in Florida after his much publicized divorce from Loni Anderson. He had more than $10 million in debt. His dinner theater was foreclosed on by the mortgage lender and his ranch was sold. Since his bankruptcy he has continued to act in movies and was awarded the Golden Globe for Best Supporting Actor in the film Boogie Nights.
Sherman Hemsley, 1938- , TV actor who played George Jefferson in All in the Family, filed for Chapter 13 bankruptcy in June of 1999. He did not have sufficient funds to repay a $1 million loan from a Las Vegas investment corporation and pay taxes he owed to the IRS. He later dismissed the case and worked out his debt outside
Marjorie Margolies Mezvinsky, 1942- , former member U.S. House of Representatives from 1993 to 1995, filed for Chapter 7 bankruptcy in February 2000. She was denied a discharge however because she failed to satisfactorily explain and disclose what happened to all her assets.
Wayne Newton, 1942- , Las Vegas entertainer, filed for Chapter 11 bankruptcy in 1992 listing more than $20 million in debt. A few years later he signed a new contract with Stardust Hotel which pays him reportedly over $25 million per year for performing at the hotel 40 weeks a year for 10 years.
Kim Basinger, 1953- , actress, earned so much money from her movies that she was able to purchase the town of Braselton, Georgia. After the purchase she was sued for breach of contract for pulling out of the movie, Boxing Helena. She was not able to pay the damages resulting from the suit and filed for bankruptcy in 1993. As
part of her bankruptcy she sold the town. She later married Alec Baldwin, had a child and won an Oscar for her role in the movie L.A. Confidential.
MC Hammer (Stanley Burrell) 1962- , musician and entertainer, filed for Chapter 11 bankruptcy in 1996 because he did not have the income to support his lavish lifestyle and defend all the lawsuits that were filed against him.
Walt Disney, 1901-1966, cartoon creator, filed for bankruptcy in 1920 after his main client of his new business filed bankruptcy. Disney said he could no longer pay his employees or the rent and had no choice but to file bankruptcy himself. In 1923 her formed a new company with a loan from his parents and his brother. In 1928 her created “Mickey Mouse” and the rest is history.
Larry King, 1933- , talk show host, filed for bankruptcy in 1960 and then again in 1978. He said each time that he was deep in debt.
Donald Trump, 1946- , businessman, filed a Chapter 11 bankruptcy case for his casino empire in 2004 to reorganize his business after negotiations with his creditors failed. This was the second bankruptcy case for his casino business, in 1992 he had filed Chapter 11 bankruptcy for his casino business.
Mike Tyson, 1965- , professional fighter, filed a Chapter 11 case in August of 2003 because he was not able to pay all his bills.
Sammy Kershaw, 1958- , country music singer, filed a Chapter 13 bankruptcy case in February 2007. He had some major hits during the early 1990’s, but nothing recently. He was facing financial difficulties with a restaurant he owned.
Stephen Andrew Baldwin, 1966-, actor, played in movies such as The Beast and Born on the Fourth of July and was Barney Rubble in the Flintstone’s Viva Rock Vegas. In 2008, he was on TV in Donald Trump’s Celebrity Apprentice. He is also a minister and appears weekly on a Christian radio show. He filed for Chapter 11 on July 21, 2009 after he defaulted on his mortgage loan. He claims to owe more than $2.3 million in debt.
Jose Conseco, 1964-, baseball player, born in Cuba and moved to the U.S. as an infant with his family. In 1988, he became the first player in major league history to hit 42 home runs and steal 40 bases in the same year. In 2005 he admitted to using anabolic steroids. In 2008 his house was sold at foreclosure and he filed for Chapter 7 bankruptcy.
Vince Neil (Wharton), 1961-, singer, He joined the band Motley Crue in 1981 and recorded such hits as Dr. Feelgood and Girls, Girls, Girls. In 1992 he left Motley and went solo recording Exposed, which debuted at number 13 on the Billboard charts. In 1995 his daughter died of childhood cancer of the kidneys ad he established the Skylar Neil Foundation in her honor. It funds cancer research. In 1998 he filed for Chapter 7 bankruptcy, but was later not satisfied with his bankruptcy lawyer and thought he was negligent in handling
his case. The judge refused to reopen the case. Mr. Neil has since started several business ventures.