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Work-Life Balance

Billionaires Who Went Broke Or Declared Bankruptcy

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Mario Tama/Getty Images /Billionaires Who Went Broke Or Declared Bankruptcy

Work-Life Balance have one more definition. It can be defined as, “the way we impact-fully utilize and productively manage, balance and integrate our wealth (financial, health, work opportunity, status, privileges, relationships, accomplishments, taste, etc), and our life.” This definition gives a different perspective of work-life balance. It shows our relationship with wealth, and how as billionaires, the middle class and low income earners we can go broke or be forced to declare bankruptcy.

Check, Define Worklife, Worklife Balance and Quality of Worklife.

When we think of bankruptcy, we often think of celebrities who have gone brokecompanies that failed and crooks who are trying to cheat the system. But as it turns out, bankruptcy is likely most common among middle-class Americans.

Same Boat For The Low Income, The Middle Class And Billionaires

In 2018, Marketplace asked Sen. Elizabeth Warren, “what is something that you thought you knew and you later found out you were wrong about?

Sen. Warren responded, that, “many, many years ago when I first started studying families in bankruptcy I thought I knew who filed for bankruptcy. I had come from a family that had been turned upside down financially but my family had never filed for bankruptcy. So I figured, you know, the people who actually go into bankruptcy, they are probably trying to cheat the system, take advantage.”

However after taking a closer look, the senator said she realized she was “very, very wrong.”

“People who filed for bankruptcy were by and large hard-working middle-class families. Folks who had worked hard, gone to college, gotten married, bought a house, and had kids. But then had just been turned upside down by a serious medical problem, a job loss, a death or divorce in the family,” she added.

9 Rich And Famous People Who Filed For Bankruptcy

Taking a list from Business Insider, let us do a quick run down of some in these category in 2015. They are rapper 50 Cent, Marvin Gaye, Kim Basinger, Meat Loaf and Cyndi Lauper. Others are rapper MC Hammer, Francis Ford Coppola, former MLB pitcher Curt Schilling, Larry King, and Mike Tyson.

The tricky financial situation that high-profile people found themselves can happen to anyone. Many factors contributed to wealthy people losing it all. It could be as a result of economic downturns, bad investments, and even massive fraud cases that landed them in hot water. Others are alimony payments, addictions, backing out of a deal, breach of contract, debt to tax authorities, or frivolous spending.

There are stories of individuals who went from rags to riches. Some others who went from riches-to-rags. And there is also a unique group, those who came from rags to riches, went from riches to rags, and then back to riches from rags.

Some Billionaires Who Went Broke Or Declared Bankruptcy

Some of the most well-known billionaires have declared bankruptcy at some point in their lives, either personally or on their companies. Other wealthy billionaires have claimed to be completely broke.

Some of the billionaires reviewed here who might had gone broke or declared bankruptcy have returned to prominence and are just as rich as they once were. However, others failed to regain much, if any, of the wealth they once had.

Patricia Kluge
Dave M. Benett/Contributor/Getty Images

Patricia Kluge was a former heiress and model. Kluge met her second husband, John W. Kluge, on a trip to New York City. Nine years later, the couple divorced. She invested a great deal of her divorce-settlement money into her vineyard, and lived the epitome of high-society life before losing it all during the housing-market crisis of 2008. 

Kluge held an auction of all her fine jewelry and other spoils of wealth to try and save herself from bankruptcy. It didn’t work, and filed for Chapter 7 bankruptcy in June 2011. Source: Business Insider.

Image: Patricia Kluge and her third husband, Bill Moses, in 2003.

Click Evictions: “No one wants to see someone removed from their housing. The tenants are in a tough position. And the people who own the buildings, that is their income.”

The less privileged and management of financial distress.
Vijay Mallya
Vijay Mallya. Reuters

Vijay Mallya was India’s airline and liquor billionaire, known for his extravagant partying and high-flying lifestyle. He owned the now-defunct Indian airline company, Kingfisher Airlines. Beginning in 2012, Mallya had racked up numerous debts to banks in trying to keep his airline business afloat. 

When he defaulted on payments, the Indian banks he had borrowed money from came looking for him. He fled from India to the UK and he is now in the process of being extradited to India to be charged with fraud and money laundering. Source: Business Insider

Click Evictions: “When the sheriff knocks, she said she plans to walk out of her house with her backpack and dog, and just keep walking”

The less privileged and management of financial distress.
Sean Quinn
PETER MUHLY/Stringer/Getty Images

Sean Quinn was once the richest man in Ireland. He acquired a great deal of success through investments in industries such as plastic, glass, and hotels. He held a 25% stake in Anglo Irish Bank, but was bailed out by taxpayers during the 2008 financial crisis.

As a result of bad investments in an Irish bank, Quinn was forced to hand over most of his $2.8 billion fortune. In November 2011, Quinn claimed his assets to be less than £50,000 when he applied for bankruptcy. Source: Business Insider

Image: Sean Quinn on October 19, 2012, after his trial was adjourned.

Click Evictions: You can demonstrate that your inability to pay is because of financial hardship due to Covid-19. That you have made your best efforts to make timely partial payments. And that you would likely become homeless if you were evicted.

The less privileged and management of financial distress.
Jocelyn Wildenstein
Grant Lamos IV/Stringer/Getty Images

Jocelyn Wildenstein, was rumored to spend monthly, $1 million on lavish purchases and $5,000 on her phone bill. The New York Post reported she filed that her monthly income was $0, survived on $900 Social Security payments and assistance from her friends and family. 

Despite $2.5 billion she received in the divorce, she said her financial troubles are from a faulty divorce settlement. That she was promised much more. In May 2018, the socialite and former wife of the late billionaire art dealer Alec Wildenstein filed for federal Chapter 11 bankruptcy protection. Source: Business Insider

Image: Jocelyn Wildenstein.

Click Evictions: “We want to be clear that those who benefit from this assistance, are still obligated to pay any accrued rent or housing payments in accordance with their lease or contract,”

The less privileged and management of financial distress.
Bernard “Bernie” Madoff
REUTERS/Shannon Stapleton

Bernard “Bernie” Madoff holds the infamous title of leader of the largest Ponzi scheme in US history. He had served as the chairman of the Nasdaq, and flew under the radar for decades before his demise in December 2008. Before the scandal, he and his wife had a personal net worth between $823 million and $826 million.

His investors’ losses accumulated to about $65 billion. In 2008, Madoff was charged with 11 counts of fraud, money laundering, perjury, and theft. Now he’s broke and received a maximum sentence of 150 years in federal prison. Source: Business Insider

Image: Bernard Madoff enters Manhattan federal court on March 10, 2009.

Surrendering As POW Is Not A Failure – Billionaires Surrender Too

Click FDIC and Foreclosure: If you are having difficulty making your mortgage payments, one of the most important things you can do is be proactive.

The less privileged and management of financial distress.
Elizabeth Holmes
299Elizabeth Holmes. Jeff Chiu/AP

Elizabeth Holmes was once a Silicon Valley star with a net worth of $5 billion. Her blood-testing company, Theranos, was valued at $9 billion. By the end of 2004, the company had raised roughly $6 million from private investors. In 2016, the Centers for Medicare and Medicaid Services (CMS) concluded Theranos’ testing might pose a safety risk to patients.

After multiple lawsuits, layoffs, and a federal allegation, Theranos closed its doors in September 2018, narrowly avoiding bankruptcy. Holmes then forfeited control of Theranos and paid $500,000 to settle charges by the SEC. Forbes lists Holmes’ personal net worth at $0. Source: Business Insider

Click Bankruptcy or Foreclosure: What is the difference between surrendering a home in bankruptcy and losing a home to foreclosure?

The less privileged and management of financial distress.
Björgólfur Gudmundsson
299299IAN KINGTON/Stringer/Getty Images

Björgólfur Gudmundsson was once the second-richest man in Iceland. He made his fortune in the brewing industry, served as owner of UK football team West Ham and a major stakeholder in the Icelandic bank Landsbanki. After the bank went under in October 2008, Forbes revised Gudmundsson’s net worth from $1.2 billion to $0 when he declared bankruptcy.

Gudmundsson and his son, Björgólfur “Thor” Gudmundsson, were both major shareholders in Landsbanki. “Thor” Gudmundsson has since gained back a great deal of his wealth, in what Forbes referred to as a “crazy comeback.” Source: Business Insider

Image: Björgólfur Gudmundsson.

We all should hang in there, there can be better times ahead, even though the ride will be bumpy, or very bumpy.

Since Life Happens To All, Including Billionaires, Do The Rich Also Cry?

Click Bankruptcy or Foreclosure: Sometimes life happens, and you’re in severe financial distress, and need to choose between bad and worse. That’s exactly the situation between filing for bankruptcy or going into foreclosure.

The less privileged and management of financial distress.
Eike Batista
Eike Batista. REUTERS/Paulo Whitaker

Eike Batista was once Brazil’s richest man. In 2012, he was worth an estimated $30 billion, making him the seventh-richest man in the world. He lost a majority of his wealth when his oil company, OGX failed to meet demands, and Brazil’s economy slid into a decline. He filed for bankruptcy in 2013. In July 2018, he was sentenced to 30 years in prison for bribing former Rio de Janeiro Gov. Sergio Cabral.

On March 24, 2020, it was announced that Batista had struck a deal with Brazilian authorities and will serve four years in prison, pay back $160 million, and collaborate with prosecutors. According to BN Americas, a court still needs to validate the deal. Source: Business Insider

As kids, we were taught that health is wealth. But growing up, life teaches a different lesson and we all run after wealth; as if wealth is health.

When Health Is Wealth, Wealth-Life or Work-Life Can Be Balanced Or Integrated

When health is wealth, we take care of our health because of our life, so we can enjoy our wealth. We strive for proper work-life integration and work-life balance. Once wealth is health, an imbalance is automatically set off. We then live to work, have inappropriate wealth-life balance, a disoriented work-life balance and nothing is integrated except the temporary acclaims and satisfaction. Long term, a lot suffers, most not quantifiable in wealth terms.

Top 5 Reasons Why People Go Bankrupt: According to Investopedia, “there are many reasons why taxpayers are forced-or choose-to declare bankruptcy. But many times, common sense, sound financial planning and preparation for the future can head off this problem before it becomes inevitable.”

It went on that, “the bankruptcy statistics in America are alarming. The past few decades have seen a dramatic rise in the number of people who are unable to pay off their debts, and Congress has recently addressed the issue with legislation that makes it harder to qualify for this status.”

Allen Stanford
299Dave Einsel/Getty Images

Allen Stanford travails began after a Texas fitness club he owned went bankrupt. He turned to offshore banking and operated a scheme were retirees were promised “safe investments,” according to CNBC. The scheme culminated in $7 billion in losses for investors. 

When the Securities and Exchange Commission raided Stanford Financial Group’s Houston headquarters on February 17, 2009, they charged the magnate and his associates with running a “massive, ongoing fraud,” CNBC reported. Stanford was convicted in 2012 and is serving a 110-year sentence in Florida, CNBC reported. His net worth is now listed at $0Source: Business Insider

Image: Robert Allen Stanford arrives for a bond hearing at the Bob Casey Federal Courthouse June 25, 2009 in Houston, Texas

“The United States’ bankruptcy system faces a major problem: many consumers are too poor to file for bankruptcy, usually because they cannot afford the necessary attorney fees.”

Low‐income, low‐asset debtors in the U.S. bankruptcy system

Personal Bankruptcy And Dealing With Debt

If you’re unable to pay your creditors, filing for bankruptcy can help you get a fresh start, according to Bankruptcy involves liquidating, or selling off, your assets to pay your debts, or creating a payment plan.

But, you should first consider other debt management options. Bankruptcy information stays on a credit report for 10 years. It can also make it difficult to get credit, buy a home, get life insurance, or sometimes get a job.

Legal disclaimer: I am not a certified financial planner/advisor, nor a certified financial analyst. I am not an economist, not a CPA, not an accountant, and not a lawyer. The contents on this site are for informational purposes only and does not constitute a professional advice.

I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.

The information on this site, or any link provided should therefore not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer or other relevant professional concerning your own situation and legal or financial questions.

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