It happens to the best, and the richest of us
Have you ever wondered about famous people who declared bankruptcy?
It happens to the best of us. You’re working hard and everything seems to be balanced just right, and one day you realize you’re in way over your head and you make that difficult decision to file bankruptcy.
Don’t lose hope.
You’re allowed to feel bad for a day (maybe two), but then it is time to get back to work and making things right again.
To help you get back on track, we’ve decided to let you in on the little-known secret bankruptcies of famous people, so you know you’re in good company. Considering the post-bankruptcy successes of these celebrities, we think your best days are still ahead of you!
Yes, Walt Disney. Many people don’t know this, but Walt’s first company was called Laugh-O-Gram, which produced short advertisements and cartoons.
But while Disney was a genius at entertainment, he was less than stellar at business. The distributor of Laugh-O-Gram cartoons cheated Disney out of most of his money, making him unable to pay his bills or keep his studio open. Finally, Walt Disney filed for bankruptcy in 1923 to get out from under a mountain of debt.
Once clear of these burdens, Disney immediately went back to work as an animator and just five years later, in 1928, he introduced the world to a new character he’d created named Mickey Mouse.
The rest, as they say, is history.
The newly-crowned king of the cameos is best known for his monumental success with Marvel Comics, but like any great artist, some of his ideas fell flat.
Stan Lee Media, formed in 1998, had a promising future and looked great on paper: the mind behind Spider Man, the X-Men, the Fantastic Four, and countless other modern myths was starting a whole new media company? Who wouldn’t sign up?
But even though the company won the Best of Show Web Award in November 2000, as the best Entertainment Portal on the internet, they were completely out of money and shut their doors only a month later. Chapter 11 Bankruptcy Protection was filed in February, 2001, and while Stan The Man is still touring and appearing in all Marvel films, Stan Lee Media is no more.
Going into business with family is always a risky business. Even if your family name is bankable, your family members may not be.
In 1884, Twain and his nephew, Charles L. Webster, formed the Charles L. Webster & Co. book publishing company. Even though he kept his name off the company, he did agree to bear 100% of the financial responsibility for the company – an arrangement set up by Webster’s attorney (of course).
Their first venture involved publishing the memoirs of former president Ulysses S. Grant, but despite the popularity of the books they produced, Twain and Webster were terrible businessmen. Between overpaying their authors and Webster’s drug addiction, the company never turned a profit.
Finally, in 1894, the firm filed for an Assignment for Benefit of Creditors (because, as you’ll know from reading our post about the history of bankruptcy in the United States, the Federal Bankruptcy Act of 1867 expired in 1878, and the US wouldn’t pass another bankruptcy act until 1898).
Ulysses S. Grant
Unsurprisingly, Grant’s own financial troubles were well-known, and were even included in his memoirs, first published by Mark Twain (see above).
It started at the end of his presidency in 1877, when he immediately went on a world tour. Prior to the Former Presidents Act, there wasn’t a pension plan or guaranteed income for presidents after leaving the White House, so the trip was entirely financed out of pocket until its conclusion in 1879.
Growing desperate for money, Grant first tried to run for a third term of office, but lost the nomination to James Garfield in 1880. He then tried to build a rail line between Oaxaca and Mexico City for the Mexican Southern Railroad, but the railroad went bankrupt and out of business by 1884.
His last hope rested on his son, co-founder of the investment brokerage firm Grant & Ward. He put $100,000 of his own money into the firm, only to have it stolen by his son’s partner Ferdinand Ward. Grant testified against Ward in 1885, but didn’t survive to see him convicted of fraud.
Fortunately, shortly after his death, his memoirs proved to be incredibly successful, and provided his widow $450,000 in royalties (more than $6 million in today’s dollars)!
So don’t let a short streak of bad luck get you down. Remember, when filing bankruptcy, you’re in the company of giants and legends, and your time simply hasn’t come yet.
Hang in there.