A Look at Celebrity Bankruptcies
In a previous post, we identified and discussed some prominent personalities who experienced significant tax and financial difficulties at some point in their careers. That post showed us that no one is immune from experiencing financial hardship. Certainly not celebrities despite managing to earn fabulous sums throughout their careers. That post also showed that taking a peek at the financial woes of celebrities brings a bit of guilty pleasure. This is mostly because these same people seem to have nearly everything turn out in their favor. We regularly spend a great deal of time tackling highly complex tax and financial concepts here on our blog. In this one, though, we thought we might turn our attention again to the world of celebrities. In this one, we’ll dig a bit deeper into the realm of celebrity financial mismanagement. Today, we’ll focus on celebrity bankruptcies.
Our earlier blog post regarding celebrity financial difficulties referenced famous personalities who had severe financial difficulty. We left celebrity bankruptcies to discuss another day. Well, that day has come. As we’ve discussed, bankruptcy is generally considered to be a “last resort” option for those with tax and financial hardships. That’s mainly because it’s procedurally complex. It also requires significant effort and energy, and leaves a long term mark on one’s financial record. In this post, we’ll look at a few celebrity bankruptcies. We;ll examine why the individuals involved ultimately saw bankruptcy as their best option. As we previously pointed out, this proves that earning extremely well is no guarantee of a secure future. That’s particularly true if the earnings aren’t accompanied by intelligent financial management. Looking at recent celebrity bankruptcies proves this point over and over again.
With prominent roles in films such as Independence Day and Vegas Vacation, Randy Quaid became somewhat of a household name in the 1990s. Then in 2000, shortly Quaid made a film, fittingly entitled The Debtors, with wife, Evi. Shortly thereafter, Quaid experienced serious financial difficulties and declared bankruptcy. Quaid and his wife also appear to have suffered a wide variety of both financial and non-financial setbacks since then. For instance, the couple was arrested multiple times, and also ignored multiple court dates. In recent years they’ve both exhibited increasingly bizarre behavior, including attempting to flee to Canada as refugees, after claiming to be in fear of their lives.
In the annals of boxing history, Mike Tyson is one of the greatest heavyweight fighters of all time. Though his boxing career has a few blemishes, his incredible power and sheer intensity will ensure that he will not be forgotten at any point in the foreseeable future. Sadly, though, Tyson has experienced more than his fair share of financial troubles. This stems, at least in part, from the fact that he lacked sufficient financial literacy to deal with the astounding financial rewards that came as a result of his professional success.
Tyson engaged in all sorts of lavish spending after achieving his financial success: he spent money on mansions, expensive jewelry, famously acquired a Bengal tiger, and made other extravagant purchases. As a result, in 2003, Tyson filed for personal (Chapter 11) bankruptcy, even though he earned well over $300 million over the course of his professional boxing career. When he filed for bankruptcy, he owed money to just about every kind of creditor imaginable: the IRS, multiple law firms, a financial manager, a former boxing manager, the tax departments of two separate U.S. states, as well as others. Few rise as swiftly and as certainly as Mike Tyson, but few have experienced such a similarly sharp financial downfall either.
As much as our President enjoys touting his successes, what many Americans don’t realize is that our President Trump has filed bankruptcy on multiple occasions. Though his personal wealth now apparently positions him comfortably among the crowd of America’s billionaires, in the past, Mr. Trump experienced considerable trouble with his business ventures. In total, Mr. Trump has declared bankruptcy for his businesses on six separate occasions. The Trump businesses which have declared (Chapter 11) bankruptcy include the Trump Taj Mahal (1991), Trump Plaza Hotel & Casino (1992), Plaza Hotel (1992), Trump Castle Hotel & Casino (1992), Trump Hotels & Casino Resorts (2004), and Trump Entertainment Resorts (2009). Although he tried to avoid Chapter 11 bankruptcies by renegotiating creditor debt, he was ultimately unsuccessful.
As we’ve seen through our review of other celebrity bankruptcies, certainly no one can doubt our President’s professional skill in certain areas, but his repeated bankruptcy filings raise some interesting questions about his financial acumen.
New York City Tax Attorneys Can Help
Again, it’s quite clear that any person can end up in a tough financial spot, including our sitting President! Of course, these celebrity bankruptcies represent extreme cases at the far end of the spectrum. Nevertheless, they deliver the clear message that properly managing finances is of major importance. Please reach out to us here at Mackay, Caswell & Callahan, P.C. Particularly if you’re currently saddled with significant back IRS tax debt, are considering bankruptcy, or have other tax issues. We can start on your case right away. No matter what the details of your particular situation, our tax attorney in NYC will be able to give you top notch professional assistance. That way, you can get your problem fixed and be back on track toward a bright future!
Image credit: Marco Verch