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Friday, July 26, 2013

Celebrity Bankruptcies Pt II

Seems like this week the theme has been bankruptcy..

Monday we discussed Detroit filing for Chapter 9 which is reserved for cities, municipalities, etc..  A judge originally blocked it because being filed in Federal rather than state court, it meant pensions could be modified...

But like all things in this corrupt system, the bankruptcy was allowed to go through Federal channels so before its all over expect Detroit pensioners to receive less than before... 5%?  10%?  20% less?  Who knows..

Just expect this to be the test case for other major cities..
Tuesday we provided the terminology and basic process when filing for personal bankruptcy..  Of course there's other ways to beat the system and not file yet discharge debts but that's for another posting...

For those in serious debt who just want to move on with their lives, we provided the primer...

Wednesday was part I of our 'Celebrity Bankruptcies' so people could understand not to feel ashamed or embarrassed filing because it can happen to us all..

Thursday.. Well.. its summer..

So here we are Friday with Part Deux...
M.C. Hammer

Whether or not you've heard of the famous rapper is really more a generational thing...

Back in the early 1990's, there was no one bigger or more successful in that music genre.  He even made parachute pants look cool.. ehh.. sorta...

Mostly based on his song "U Can't Touch This" which heavily sampled Rick James' "Superfreak",  Hammer (Stanley Kirk Burrell) ultimately sold more than 50 million records globally in his career.
During Hammer's peak, he was worth $33 million..

A mere five years after that song was released (1996), Hammer filed for Chapter 11, telling a California bankruptcy court he was $13.7 million in debt and had assets of only $9.6 million.

So what happened?
Well to put it bluntly, the man had a spending addiction..

He spent at estimated $12 to $20 million building a custom mansion on a 20-acre estate.

Hammer also had a Huge entourage of 60 onstage performers and 100 backstage members which cost him millions of dollars..  Guess he needed one person to hand him a soda, another to offer a glass and a third to do the pouring...
Among the debts was a $110,000 sum owed to an interior decorator whose business failed because of Hammer’s nonpayment.

Ultimately after his meteoric rise and fall, Hammer became a Minister... An extremely well dressed one...
Walt Disney

Disney was fortunate because his bankruptcy experience came at the ripe young age of 21 before he became rich...

He had founded a company called Laugh-O-Gram in the early 1920s and based it in Kansas City, MO as an early attempt at an animation studio, which set out to make a film version of Lewis Carroll’s Alice in Wonderland.

The production was plagued by difficulties and the expense of hiring and relocating animators to the midwest..  Ultimately, a near-indigent Disney declared bankruptcy...
Of course we all know what ultimately happened afterwards with the success of Disney as a corporation today with total revenues of more than $38 billion last year....

But most people don't know the company almost went bankrupt in the late 1950s due to the making of 'Sleeping Beauty'.

The film took almost a decade to make due to the intricate and elaborate background drawings all done by hand.  It is truly Disney's most visually stunning and breathtaking film in terms of the amount of artistic detail displayed in every frame
The film cost $6 million- the equivalent of $48 million today, and lost money on its initial theatrical release because audiences seemed to find the story too derivative of Snow White and Cinderella.

The high production costs along with the underperformance of much of the rest of Disney's 1959–1960 release slate resulted in the company posting its first annual loss in a decade for fiscal year 1960..

Massive layoffs were done throughout Disney's animation department to avoid a potential bankruptcy...

Ultimately "Sleeping Beauty" made up its losses and turned a profit but Disney swore he'd never spend so much time and money to make a film again.
Stan Lee

Stan Lee (born Stan Lieber) is a comic book writer, editor, publisher, media producer, voice actor and former president and chairman of Marvel Comics

Despite the massive success of comic book heroes like Spider-Man, The Incredible Hulk and The X-Men, Stan Lee had to declare bankruptcy in 2001 when his start-up, 'Stan Lee Media', a web-based comic book venture quickly burned through its capital like so many other firms inflated by the tech bubble.
Adding insult to injury was that Lee’s partner, Peter Paul, was accused of securities fraud and stock manipulation and had to be extradited back to the US from Brazil where he hid to avoid prosecution..

Lee was never implemented in the scheme.

By 2006, Lee had been with Marvel Comics an amazing 65 years and due to the immense popularity of his comic book creations on the big screen over the last decade, Lee has little to no financial worries any longer..
Nicolas Cage

Did you ever wonder why for the past few years, it seemed Cage was in every movie and all of them pretty terrible?

Well the reason was he was living paycheck to paycheck to pay off $6 million in IRS debts

He also spent money like a crazed banshee-- two castles, 15 palatial homes, a flotilla of yachts and a squadron of Rolls Royces...
~ Cage's former mansion in Bel Air

According to deposition of Cage's former business manager, n 2007 alone, "Cage's shopping spree entailed the purchase of three additional residences at a total cost of more than $33 million; the purchase of 22 automobiles (including 9 Rolls Royces); 12 purchases of expensive jewelry; and 47 purchases of artwork and exotic items"

Prior to Cage's bankruptcy filing in 2009, based on his lavish lifestyle, he needed $30 million yearly just to keep afloat!
~ Another of Cage's former mansions

Cage's financial collapse came in 2008 when real estate values plunged and most of his residences turned "upside down, just as the global credit crunch made it impossible to cover his endless cash calls by borrowing more money

And that is the reason you saw former Oscar winner for 'Leaving Las Vegas' appear in crap like 'Bangkok Dangerous', 'The Sorcerer's Apprentice', 'Season of the Witch' and a sequel of sorts to 'Bad Lieutenant'
Well..  We don't think we can find another celeb to top that one..

Happy Weekend..  Be back on Monday...