We like to think that being rich will solve all of our problems, but that’s not the case. Even the super wealthy can lose it all in the blink of an eye. In this feature, we’ll tell ten tales of insanely rich men who went bankrupt. The reasons vary from bad investments to nasty divorces, but they all end the same way: in the poorhouse.
In 2008, Sean Quinn was the richest man in all of Ireland, with a net worth north of four billion Euros. He made that money from a wide range of industries, including gravel, plastics and hospitality, but diversification led to his fall from power. In 2007, Quinn took a 28 percent interest in Anglo-Irish Bank, which then collapsed during the subprime mortgage crisis, costing him an estimated 2.8 billion Euros. Quinn Insurance also took a heavy hit, and by 2010 the wolves were at the door. Multiple lawsuits against him for financial chicanery led to him filing for bankruptcy in 2011, and Quinn was also jailed in 2012 for contempt of court.
Winning the lottery seems like a one-way ticket to the good life, but unfortunately it’s not always so. Suddenly coming into a large sum of money doesn’t bring any knowledge of how best to use it. In 2002, Jack Whittaker won the largest lottery payout to date in West Virginia – a staggering $314 million. He took it as a one-time payout of $113 million after taxes and went on to flush the entire sum down the toilet at casinos, strip clubs and other dens of vice. At one time, thieves even robbed him of half a million dollars in cash he was carrying in the front seat of his car. An acrimonious divorce further depleted his coffers, and in 2012 he was sued for bouncing checks at an Atlantic City casino for over $1.5 million in gambling losses.
Las Vegas is where dreams are made and dashed, and nobody knows that quite as well as Rick Burton. In 2008, the Nevada developer made the papers by outbidding some of the city’s major players on a project to build a private air terminal at McCarren International Airport. Unfortunately, the project faltered, along with similar ones in other states, and Burton’s company hit the skids hard under the weight of dozens of lawsuits from unpaid creditors. In 2012, Burton was forced to file for bankruptcy against a staggering $310 million in liabilities. He’s currently working at a company that provides sandbags to construction sites.
Pro athletes are not well known for their financial acumen, and the list of sports stars who lost it all stretches on for miles. One of the most insane personal bankruptcies from the world of sports comes courtesy of boxing legend Mike Tyson. “Iron Mike” pulled in over $200 million in fight fees and endorsements during his career, but he spent the money just as quickly on mansions, exotic animals and a pricey divorce. In 2003, at the end of his rope, Tyson was finally forced to file for bankruptcy. The court filings revealed that he had $23 million in unpaid debts and no real income stream to pay them off. Years later, he went on "The View" and claimed to be living paycheck to paycheck.
Clint Murchison, Jr.
Bankruptcy filing isn’t a new thing. Let’s take a trip back a few decades to one of the most shocking financial collapses of the 1980s. Clint Murchison, Jr. came into his wealth the easy way – by inheriting it from his oil baron father – and he and his brothers invested in a wide array of companies, including being the founding owners of the Dallas Cowboys. But a series of bad investments coupled with a dip in the real estate market forced the multi-millionaire into bankruptcy in 1985, with his assets being sold off to satisfy over $500 million in debt. Stripped of his fortune, Murchison, Jr. died just two years later.
T. Cullen Davis
Billionaire Texas oil heir T. Cullen Davis has a double spot in the hall of shame. Not only did he lose his family’s fortune, he’s also the richest person to ever stand trial for murder. Davis inherited tons of oil-rich land from his parents and proceeded to spend his wealth on all kinds of things. In 1976, Davis’ wife Priscilla had filed for divorce and was living with her boyfriend when a gunman broke into their house and shot them both. Davis was the prime suspect for hiring the hitman, but was found not guilty despite some pretty damning evidence. The recession of the early 1980s reduced his fortune to a pittance and he filed for personal bankruptcy in 1986 with debts of over $230 million.
Here’s a bankruptcy tale from the early 1900s that shows that there’s always a way back from even the worst financial situation. Jesse Livermore was known as the “Boy Plunger” for his incredible knack for shorting stocks at just the right time. He made a bundle in the crash of 1907 with this innate timing, racking up a net worth of $3 million (approximately a billion dollars in 2013 money). Then, he lost it all on one botched deal – a blown cotton trade. When the markets stagnated in the 1910s, Livermore ended up a million dollars in debt and filing for bankruptcy. Amazingly enough, after World War I kickstarted the markets, Livermore climbed back to the top, paying back his creditors and amassing a personal worth of $100 million after the 1929 crash. It didn’t last, though; by 1934 he was bankrupt again.
One of the most famous bankrupt celebrities of all time, the King of Pop had a record contract worth almost a billion dollars. That still wasn’t enough to save him from filing for bankruptcy over a $25 million loan in 2007. The loan was taken out on Neverland Ranch, Jackson’s sprawling home in Santa Barbara County. MJ was a classic case of low liquidity on too many assets, with his future royalties heavily borrowed against, and it bit him in the ass multiple times. Jackson, who hadn’t released an album in six years, was unable to make the mortgage payments on the property. Jackson filed for bankruptcy and an investment group purchased the property in 2008. When Michael Jackson died in 2009, he was reported to have $331 million in debts to be paid out of his estate.
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Often times what drives a rich person into bankruptcy is just one foolish act. For Canadian soldier and financier Henry Pellatt, it was the construction of Casa Loma, his Toronto mansion that was the largest private residence in Canada when it was built. The house cost approximately $3.5 million when it was completed in 1914, and featured three bowling alleys and an oven big enough to cook a whole ox. Pellatt, however, lost huge portions of his fortune when electricity was nationalized. He was forced to leave the house in 1923 and went bankrupt soon after, being taken in by one of his former servants. He died in 1939 with just $85 to his name.