Bankruptcy. The word brings shudders to many of us, but in 2011 it’s more of a practical reality and a best option for many people, lawyers included. Should you be ashamed of your crappy financial condition? Donald Trump does not seem to think so. He’s filed four times, though with corporate entities and not as the actual Donald. But most lay people don’t know the difference. We at Bitter Lawyer think that, if you do file, you should be proud to be in elite company, which includes rock stars, movie stars, business moguls and even a former President of the United States. With so many to pick from, here are our five favorite top dog bankruptcies.
1Samuel L. Clemens (“Mark Twain”). Best-selling American author and humorist. He filed in 1894. Twain gambled big with his earnings from his writing on investments, mostly in new inventions and technology, particularly the Paige typesetting machine. Twain spent $300,000 (equal to $7,590,000 today) on it between 1880 and 1894, but before it could be perfected, it was made obsolete by the Linotype. Basically the equivalent of putting all your money in pagers just as cellphones became widely used. Twain also lost money through his publishing house, which enjoyed initial success selling the memoirs of Ulysses S. Grant, (who also appears on this list!) but went broke soon after, losing money on a biography of Pope Leo XIII; fewer than two hundred copies were sold. Yeah, we never heard of that Pope either.
Lucky for Twain, he befriended Henry Huttleston Rogers, a principal of Standard Oil. who made Twain file for bankruptcy. Then Rogers had Twain transfer the copyrights on his written works to his wife, Olivia, to prevent creditors from gaining possession of them. The oldest bankruptcy trick in the book. Literally.
2Walt Disney. Oscar-winning film producer; animation & theme park pioneer. He filed in 1923. Walt Disney began making his own cartoons in the 1920′s. When his main client went into bankruptcy, Disney could not pay his staff or his rent. He had no choice but to declare personal bankruptcy. This rocky start did not deter Walt Disney from producing Oscar winning films and pioneering theme parks. Rather, filing bankruptcy provided Walt Disney the ideal opportunity he needed to make a fresh start and prove himself as a great American success story. So basically, we are saying that if you file, you can probably expect to become the next Walt Disney.
3Francis Ford Coppola. Oscar-winning film writer-director-producer. He filed in 1990. After the success of the Godfather, Coppola went ice cold at the Box Office. Though Apocalypse Now, may be critically acclaimed, it soared $15 million over budget. Next, Coppola made a dubious financial move and borrowed $8.5 million from Canadian real estate mogul Jack Singer to finance One from the Heart. The film cost $30 million and grossed $636,000.00. Do the math. When Singer sued to collect on his debt, Copolla did what any red-blooded American in deep financial doodoo would doodoo. He filed for bankruptcy.
4Willie Nelson. Singer-songwriter-actor. This one is not altogether unsurprising as Mr. Nelson doesn’t seem all too concerned by material things. Unless weed qualifies as a material thing. After Nelson finished touring with Waylon Jennings, Kris Kristofferson, and Johnny Cash as part a group called The Highwaymen, the Internal Revenue Service (IRS) handed Nelson a bill for $16.7 million in back taxes and seized most of his assets to help pay the charges. This caused him to immediately declare bankruptcy in 1990. Later that year, he did what any artist in that situation would do: he released The IRS Tapes: Who’ll Buy My Memories? as a double album, with all profits going straight to the IRS.
5Ulysses S. Grant. 18th U.S. President; Civil War general; best-selling American author; face is pictured on the U.S. fifty dollar bill. He filed for bankruptcy in 1884, after leaving office. He was swindled by a Wall Street trader (what else is new) and no longer had his military pension, as back then becoming commander-in-chief made you ineligible. Thankfully, Mark Twain offered Grant a generous contract for his memoirs, including 75% of the book’s sales as royalties. Guess that’s why Twain had his own problems! Congress also restored Grant to General of the Army with full retirement pay. It was literally the least they could do for the man who helped win the civil war and reunite our nation. Terminally ill, Grant finished his memoir just a few days before his death. The Memoirs sold over 300,000 copies, earning the Grant family over $450,000.