Court documents: Michael Jackson had debts of over $500 million at the time of his death

Michael Jackson was reportedly drowning in debt when he died in 2009.

Court documents filed in Los Angeles on June 21 and obtained by People on Thursday say the King of Pop owed more than $500 million to more than 65 creditors shortly before his death.

Jackson has “more than half a dozen lawsuits pending worldwide” and “more than 65 creditor claims have been filed in connection with the bankruptcy, giving rise to additional lawsuits, some of which have ended in trials,” the petition states.

According to the new documents, Jackson’s estate was able to “renegotiate and restructure financing arrangements,” including a deal with Sony for Jackson’s music publishing rights for several artists, at “significantly reduced interest rates” to avoid further losses and pay off debts.

The $750 million deal allowed Sony to acquire Sony/ATV, which owned the rights to nearly 3 million famous songs by artists such as John Lennon, Paul McCartney, David Bowie and Taylor Swift.

Despite the settlement of these financial matters, Jackson’s estate is reportedly still owed a significant amount of money because “difficult business, tax and legal issues remain that the executors and their advisors must continue to address,” the petition states.

The filing also reportedly points to a pending final decision on a victory in a court battle with the IRS in 2021.

Jackson’s three children, Prince (27), Paris (26) and Bigi Jackson (22), the beneficiaries of his estate, have been denied access to any money from their trust until the dispute with the IRS is resolved.

Court documents previously obtained on page 6 show that a tax audit found that the estate had been issued a “notice of deficiency” because it had “undervalued its assets” and owed “$700 million in taxes and penalties.”

However, a spokesperson for the estate previously downplayed the information in the filing, telling us, “In the publicly available annual reports to the probate court, anyone can see that the estate provides very substantial amounts of money to Michael’s mother and children for their support.

“The estate has a very collaborative relationship with Michael’s children and whenever they need something, the estate works with them to make sure they are very well taken care of, just as Michael would have wanted.”

In February, Sony Music invested even more money in the estate, reportedly buying the music superstar’s music catalog – which includes hits like “Beat It” and “Billie Jean” – for at least $600 million.

The Los Angeles Times had previously reported that Michael’s high debt was largely due to his excessive spending habits.

Accountant William R. Ackerman testified in 2013 in the wrongful death trial of the “Smooth Criminal” singer that he spent a lot of money on charitable donations, gifts, travel, art and furniture.

Michael’s spending habits were revealed during his 2003 interview with Martin Bashir, in which he went on a shopping spree at a Las Vegas antique store.

In March 2005, just three months before his death, prosecutors at his sexual abuse trial described him as a “shopping addict” who was on the verge of bankruptcy.