Americans have long used bankruptcy law to get a fresh start!
To get him out from under foot, in 1690 King Charles II granted William Penn an estate in the American colonies. Penn created a Quaker refuge and his manager borrowed to the hilt on the estate and fled with the money. Penn was left holding the bag and ended up in a British debtors prison. His former estate became the State of Pennsylvania.
Meriwether Lewis of Lewis & Clark fame, sent by President Jefferson to map the western territory went into debt to fund his explorations. He later stabbed himself to death on the way to debtors Court in St. Louis.
Frontiersman Daniel Boone borrowed to fund his fur-hunting expeditions, but it did not always work out. In some cases unfriendly Indians took his fur in exchange for letting him keep his scalp. Boone's lawyer said he had more lawsuits entered against him than any other man of his day. Boone's motivation for settling Kentucky was to avoid his creditors back east.
Abraham Lincoln's Illinois general store failed. After winning a spot in the State Legislature, Abe noticed his horse and saddle were gone. They were repossessed by the Sheriff! Later, he confided to a friend that debt was his life's greatest obstacle. Honest Abe also practiced Bankruptcy Law in Illinois before moving on to hold the United States together as President during the Civil War.
A resort investment gone bad led to Las Vegas superstar Wayne Newton's fresh start in 1992. Casino gambling was not approved for Pennsylvania after all and Newton lost his shirt.
Musician Mick Fleetwood got his fresh start in 1984 after taking a financial dive investing in Australian real estate and oil and gas.
Conrad Hilton lost all his hotels when he could not pay his bank during the great depression. Later, he bought them all back and built a few more.
J.C. Penney's first store went bankrupt when he refused to give Whiskey as a kickback for orders from a large customer. Penny went belly up and got a job in a drapery shop which he later purchased and expanded into 1100 department stores nationwide.
Famous Architect Frank Loyd Wright lost his home, Taliesin in Wisconsin and was thrown on the street when business dried up in 1922. During the following decade, he designed some of his most famous projects.
American Author Mark Twain spent nine years in Europe avoiding creditors of his defunct typewriter invention business. Twain returned to the United States in 1864 to file bankruptcy.
President Ulysses S. Grant lost his fortune in an early Ponzi scheme. Mark Twain helped Grant write his memoirs while Grant suffered from Cancer so the proceeds could support his family after his death.
Harry Truman opened a shop in Missouri after the First World War only to have it fail. He was humbled by having to move in with his mother-in-law. Truman settled his debt for pennies on the dollar when his bank went bankrupt! Later, he got a good job, in Washington, DC.
Roland Hussey Macy failed at selling ribbons, provisions to miners and at a general store before going bankrupt in 1855. His next effort, Macy's became the worlds largest store.
While in debtors prison, Charles Goodyear experimented with rubber mixes. Later he accidentally created weatherproof rubber by mixing in sulpher and applying heat. Goodyear had poor patent protection. The Goodyear company was named in his honor only, he saw few profits himself.
Walt Disney lost his company in Kansas City and moved to California with $40 in his pocket where he started another business.
Country Music Singer Willie Nelson got his fresh start after the IRS disallowed tax deductions and demanded a $9,000,000 check. Ouch!
Oskar Schindler spent all the money he had to feed, cloth and provide medicine to the 1098 Jews he saved while operating a factory in Poland during WWII. Schindler was en route to debtors prison when the people he saved and their families combined funds to pay off his debts and support Oskar until he died in 1974.
Actor Gary Burghoff, "Radar" from the film and TV series M.A.S.H. hit hard times after the show ended, filing bankruptcy in 1991. Now he sells his wildlife drawings for up to $25,000 each.
Famous "G Man" Eliot Ness (who captured the notorious Chicago Gangster Al Capone) tried politics in Cleveland but lost in a landslide after spending every dollar he could muster. His book "The Untouchables" bombed. After Ness died, his exploits were made famous in television and film; too late for Ness to benefit.
Film director Francis Ford Coppola's disdain for tight studio budgets led him to finance his own films. He made a movie called "One from the heart" for $30,000,000 and it produced $636,000 in revenue. But Coppola also directed The Godfather series, so all is forgiven and then some.
John Wayne Bobbitt gained fame when his wife, in an act of rage, removed his manhood with a razor. A 12 hour surgery successfully resulted in re-unification. When the uninsured Bobbit later went bankrupt, his doctors remarked, "He stiffed us", really.
Sam Walton's first store was a Ben Franklin discount shop which he made one of the most successful in the chain. Walton's problem was a short lease, when it expired, the buildings owner canceled his lease and took over the store himself. Walton had to start from scratch. He later created the largest company in the world and became a billionaire.
Rapper MC Hammer, unable to continue support of his 70 member posse, filed bankruptcy in 1996 saying, "It's time to stop bleeding and get on with my life".
65 Famous People Who Went Bust
More Famous & Bankrupt.
Big Corporate Bankruptcy Cases just since 2000:
Adelphia
Chrysler
Conseco
Delta
Delphi
ENRON
Enron set a new standard in corporate corruption by ginning up "profits" by institutionalized, systematic, and creatively planned accounting fraud. They were so corrupt, they also brought down one of the most respected American accounting firms, Arthur Andersen.
General Motors
General Growth Properties (Jordan Creek Town Center, West Des Moines, Iowa)
General Growth acquired expensive real estate leading up the the 2008 recession at which point it could not make its mortgage payments. Bankruptcy allowed General Growth to keep operating.
Global Crossing
Pacific Gas & Electric
Trump Entertainment (Third Time)
Tyco
US Air
IndyMac
Lehman Brothers
Think consumers balance transfers or cash advances can get out of hand? Lehman had $138,000,000,000 (billion) in Federal Reserve backed advances. Guess who paid for that one?
Northwest
Refco
SemGroup
Washington Mutual
WorldCom
45 Airline Bankruptcy Cases
Systemic change can spur industry wide bankruptcy: Trans World Airlines, US Air, United, Northwest, Delta, Skybus, Frontier etc. just as systemic change (recession/high unemployment, underemployment etc.) can spur wide consumer bankruptcy filings.
Also, we the people spent $700,000,000,000 (700 Billion) dollars to bail out Wall Street in 2008.
One of the reasons we have an incredibly efficient free market economy is the safety net of bankruptcy. Without the bankruptcy option, companies could not take risks and individuals would suffer indentured servitude. Bankruptcy rocks!
Jeff's favorite poem:
Stopping By Woods on a Snowy Evening
Whose woods these are I think I know.
His house is in the village though;
He will not see me stopping here
To watch his woods fill up with snow.
My little horse must think it queer
To stop without a farmhouse near
Between the woods and frozen lake
The darkest evening of the year.
He gives his harness bells a shake
To ask if there is some mistake.
The only other sound's the sweep
Of easy wind and downy flake.
The woods are lovely, dark and deep.
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.
-Robert Frost
Jeff's favorite song lyrics, Memory
Daylight
I must wait for the sunrise
I must think of a new life
And I musn't give in
When the dawn comes
Tonight will be a memory too
And a new day will begin
-Cats, the Musical
Jeff Mathias Law Office
4800 Mills Civic Pkwy
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West Des Moines, IA 50265
1-800-997-1395
515-261-7526
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