Honestly, there are not many things that can shock you as quickly as the news of a bankruptcy. The headlines are twice as unexpected when they deal with a celebrity living the high life or a company that seemed untouchable. The list of rap stars whose palaces are larger than entire villages, and the list of financiers who have been around longer than the light bulb, is a growing one. It is like a trend of their downfall despite the fact that they are billionaires. So, do not go anywhere with your popcorn—here come the 10 most surprising bankruptcies and cash crises that happened either in the sphere of fame or the finance industry.
10. Toys “R” Us: Game Over for Childhood
For years, Toys “R” Us was the go-to destination for children. Nostalgia doesn’t, however, cover rent. Following a $5 billion debt burden that came with a leveraged buyout and efforts to go digital that were too little, too late, the retailer petitioned for Chapter 11 in 2017. By 2018, all U.S. locations closed—displacing thousands of workers and causing a generation to mourn the death of Geoffrey the Giraffe.
9. MC Hammer: Riches to Rags
MC Hammer transitioned from international superstar to fiscal cautionary example in the blink of an eye. Having raked in tens of millions in the early ’90s, his extravagant way of life—complete with hundreds of employees—came back to haunt him. In 1996, Hammer was $13 million in the hole and bankrupt. The bright side? He became a preacher, then a tech mogul, demonstrating that there’s always a second act.
8. Burt Reynolds: The Price of Fame
During his heyday, Burt Reynolds was Hollywood royalty. But with poor investments, costly divorces, and constant overspending, the money train finally crashed. By 1996, he owed almost $10 million and went bankrupt. Even though he never really came back financially, Reynolds remained a popular guy until his death—a reminder that fame doesn’t always translate to wealth.
7. Dave Ramsey: A Money Makeover, the Hard Way
Before he became America’s financial planning guru, Dave Ramsey learned the hard way. In his 20s, he was a hot real estate investor with a fortune—until his short-term investments were called in unexpectedly. Having to file for bankruptcy in 1988, Ramsey saw creditors almost clear out his home. Rather than give up, Ramsey used his failure to form a career advising others on how not to make the same mistakes.
6. Francis Ford Coppola: A Director’s Debt Trilogy
Coppola might have made The Godfather, but even legends sometimes make poor investments. After funding the 1982 bomb One From the Heart himself, he went bankrupt—then repeated the process. And again. Through it all, his financial rollercoaster notwithstanding, Coppola continued to direct and even bankrolled ambitious passion pictures for himself. Bankruptcy didn’t curb his vision, but it did show that even Hollywood legends are vulnerable to financial consequences.
5. Mike Tyson: From Heavyweight Champ to Heavy Debts
Mike Tyson earned over $400 million throughout his career—by 2003, however, he was $23 million in debt. Extravagant spending, lawsuits, and IRS battles siphoned off his wealth, leaving him bankrupt. But as in the ring, Tyson mounted a comeback—this time through roles on television and in films, endorsements, and a successful cannabis empire. These days, he’s more pop culture icon than cautionary figure.
4. Lehman Brothers: Wall Street’s Ticking Time Bomb
Lehman Brothers was once the giant of American finance. But its massive bet on mortgage-backed securities proved to be a death warrant when housing crashed in 2008. Without a government bailout, the 158-year-old institution imploded under $639 billion in assets—the biggest bankruptcy in U.S. history. Lehman’s collapse didn’t simply annihilate a company; it became the embodiment of the Great Recession itself.
3. Enron: The Empire Built on Deceit
In its heyday, Enron was a company to be emulated as a corporate visionary. Behind closed doors, it was outright deception—concealing enormous debt with accounting sleight of hand. When the deception was exposed in 2001, the corporation blew up with $63 billion in assets and destroyed pensions, employment, and investor confidence in one fell swoop. The tragedy gave birth to the Sarbanes-Oxley Act, reshaping the standards of corporate accountability.
2. Britney Spears: A Conservatorship Prison
Britney Spears never went bankrupt, but her finances were sealed up for 13 years in a court-appointed conservatorship. Under the control of her father and an entourage of handlers, Britney exercised little or no control over her money—or even her own life. In 2021, after a publicized courtroom struggle, she finally took back control. Her experience illustrates how money can be used as a tool of control—even over one of the most successful living pop singers.
1. Abraham Lincoln: Honest Abe’s Long Road to Payback
Before he ever became president, Abraham Lincoln was saddled with burdensome debt from a failed general store he owned with a partner. When his partner passed away, creditors descended on Lincoln, foreclosing on property and leaving him financially devastated. He took almost 20 years to pay it off, but he never lost hope. His path from bankrupt shopkeeper to president shows that financial devastation doesn’t have to mean your future is ruined.
From presidents to movie stars, rappers to Wall Street moguls, bankruptcy has fallen upon some of the most well-known names throughout history. These tales are complicated, appalling, sometimes even inspiring—but they all remind us that money can disappear in an instant. The true test is what you do next.