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Bankruptcy is often thought of as something that happens to ‘life’s losers’ or to the ‘down and outs’, but bankruptcy happens to people everywhere – from the arena of movies, sport, business and entertainment. Famous bankruptcies proves that bankruptcy is ordinary even if you aren’t.
Before you take your place among the rich and famous, consider alternatives to bankruptcy such as a Debt Management Plan or IVA.
The actor Burt Reynolds was once just as famous for bankruptcy as he is for his moustache. Movies such as The Cannonball Run (1981) made him a box office hit and a household name in the USA and Europe. In 1996 Reynolds filed bankruptcy after an expensive divorce from Loni Anderson forced him to sell his east and west coast properties in order to repay a $10m debt.
When Senate addressed bankruptcy loopholes in 2001, it was already too late to stop Reynolds from keeping his $2.5m Florida mansion – something that infuriated creditors and some politicians. Senate even cited the leniency towards Reynolds as a reason for revising bankruptcy law. In 2005 President Bush tightened bankruptcy law further at the behest of unhappy creditors who believed bankruptcy was still an easy option for debtors not willing to pay bills.
As for Reynolds, after some kamikaze career moves he bounced back with a Golden Globe for Best Supporting Actor in Boogie Nights.
Kim Basinger made her mark on cinema with hit movies such as 9½ Weeks (1986), Batman (1989) and L.A. Confidential (1997), for which she received an Oscar for Best Supporting Actress.
It’s believed Basinger’s problem with agoraphobia prompted her to buy a small town called Braselton, Georgia in 1989, which was seemingly irresistible at $20 million. The actress made the purchase with the ambitious plan of turning the sleepy town into a tourist attraction complete with festivals and movie studios. Her hopes were dashed, however, when in 1993 she sold it having been overwhelmed with financial problems.
Sadly things got worse for Basinger when she was hit with an $8m lawsuit after making the controversial Boxing Helena. As a result of the legal action taken by the studio, she filed for bankruptcy and managed to settle for a lesser amount.
At 21, Mike Tyson was the youngest heavy weight world champion and in his peak systematically beat anyone that entered a ring with him. His ability to pack a punch was matched only by his ability to make a purchase – interests included limousines, watches, jewelry, cars, mansions, clothes and Siberian tigers. You could say he had expensive taste – even his choice of pet cost thousands of dollars upkeep every month. Add that to his party lifestyle and poor financial decisions and you almost see why he ended up with debt worth $27m, excluding back taxes. Almost.
Tyson was able to file for chapter 11 bankruptcy in 2003 due to his vast earning potential but his boxing days were finished after a number of embarrassing comeback attempts. It has been a little over 10 years since Tyson could demand a $30m paycheque per fight. Times are tough for Tyson.
If ever there was a fairytale ending, it was in the story of Walt Disney. It wasn’t all puppies and rainbows for the king of cartoon. In 1922, as a young man in Kansas, his first attempts at starting a film company ended in disaster. The only thing he had to show for his endeavours was a pile of debts he couldn’t pay.
Disney’s debt problem began when he struck a deal with a film distribution company working out of New York City. The deal turned sour when the distribution firm did the dirty on Disney and cheated him out of money. Now finding himself without the financial muscle afforded him by the NY company, he couldn’t could pay his bills and his studio filed bankruptcy in 1923.
Disney’s fortunes were reversed five years later in Hollywood with the creation of a mouse called Mickey.
Abraham Lincoln was certainly no ordinary person but at the same time faced ordinary challenges. Prior to running the United States, Lincoln couldn’t run a shop. The former president co-owned a general store in Illinois, in 1832. With his business partner, Abe succeeded in accumulating huge amounts of credit from suppliers without being able to make any sales of his own.
Seeking a way out of his debt problem, Abe sold his shares to his business partner. Unfortunately, for his partner and for Abe, he died leaving Abe responsible for a $1,000 debt. Creditors soon swooped and without any bankruptcy laws to support his predicament, Abe was forced to sell his assets – a horse and some surveying equipment – before agreeing to repay the remaining debt, which he did well into the next decade.
When the famous playwright, Oscar Wilde, was sentenced to two years hard labour for gross indecency in 1895, his whole world collapsed. Friends disowned him, press hounded him and theatre dropped his productions like a hot potato despite the roaring success of A Woman of No Importance.
The Marquees of Queensberry’s son, Lord Alfred Douglas, had a sexual relationship with Wilde for which the Marquees sought to punish him financially as well as with incarceration.
Wilde had spent £600 unsuccessfully defending Marquees’ libel charges and as a result of the lawsuit also had to pay court costs. Marquees demanded payment in full, which gave Wilde no option but to go bankrupt.
Bankruptcy forced Wilde to sell valuable books as well as an assortment of artworks created by his friend Aubrey Beardsley. Wilde suffered the additional humiliation of appearing in a bankruptcy court cuffed by chains before being returned to jail to await trial. The outcome of the trial would be 2 years hard labour in Reading Prison. Wilde duly served his time and was released, but to a life very different to the one before prison. Over time Wilde was to enjoy some further successes as a poet-playwright and with a little help from his friends, regain ownership of his estate.
Francis Ford Coppola has been credited with making some of the finest films ever made with The Godfather trilogy and rightly so. Although plagued with problems both on set and off, Apocalypse Now was another masterpiece that made Coppola one of Hollywood’s most respected directors. (Apocalypse Now was delayed to such an extent that critics dubbed it Apocalypse When?)
Unfortunately Coppola couldn’t maintain the high standards he set himself and went on to make a succession of movies that bombed in the box office, such as The Cotton Club (1984).
Prior to the aforementioned disaster he made another flop in One From the Heart (1982), a move that cost $26m. The movie’s failure meant Coppola spent the rest of the 1980s paying off debts narrowly escaping bankruptcy in the process. Zoetrope Studios, who made the movie One From the Heart were less fortunate and filed for Chapter 11 bankruptcy in 1990.
If this page has helped dissolve some preconceived ideas you may have had about bankruptcy, then don’t stop here, visit Bankruptcy Myths for more information.
