April
26, 2021
4 min read
This story originally appeared on ValueWalk
It is very rare for a person to achieve the status of billionaire and then lose it. Although it is a rare occurrence, it is not unheard of. Usually, one expects a billionaire to be shrewd enough to protect their wealth. However, situations could get tough sometimes. Unfavorable economic scenarios, bad investments or fraud can force billionaires to file for bankruptcy. Let’s take a look at 10 billionaires who went broke.
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10 Billionaires Who Went Broke
We have referred to several sources, both online and offline, to come up with the list of 10 billionaires who went broke. The list is in no particular order:
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Aubrey McClendon
Co-founder of oil and gas company Chesapeake Energy, McClendon reportedly had a net worth of about $1.2 billion. However, in 2016, he was accused of unfairly manipulating bids for drilling rights and indicted on federal conspiracy charges. One day after he was charged, McClendon died in a car accident. It is believed that he had massive outstanding debts, and thus, his net worth was close to zero when he died.
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Björgólfur Gudmundsson
Gudmundsson was once the second-richest man in Iceland and held a major stake in a bank, Landsbanki. At the time of the 2008 financial crisis, his bank collapsed and was taken over by the Icelandic government. Gudmundsson then filed bankruptcy, and Forbes revised his net worth from $1.2 billion to $0. He also had to sell the Premier League soccer team (West Ham United Football Club) he owned.
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Jocelyn Wildenstein
Wildenstein, who was popularly known as “Catwoman” because of her appearance, was a big socialite. It is reported that she use to spend $1 million on luxury purchases and $5,000 on her phone bill a month. In May 2018, she declared bankruptcy, claiming that she had $0 in her checking account. Wildenstein is a former wife of late billionaire art dealer Alec Wildenstein.
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Eike Batista
Oil baron Eike Batista was once the world’s seventh-richest person. He started to lose money after his oil company, OGX, was unable to meet its production targets. Batista’s financial woes aggravated after Brazil’s economy faced hardship. In 2012, his net worth was estimated to be $30 billion, and in 2017, he was charged with money laundering and corruption. He also filed for bankruptcy.
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Sean Quinn
Quinn was among the richest men in Ireland, but the 2008 financial crisis forced him to file for bankruptcy in 2011. At the time, Quinn claimed that his assets were less than 50,000 pounds (down from his $2.8 billion fortune). He held a 25% stake in Anglo Irish Bank, but during the 2008 financial crisis, the bank had to be bailed out using taxpayers’ money. It was taken over by the government.
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Allen Stanford
Stanford is serving a 110-year sentence for running the second-biggest Ponzi scheme ever in the U.S. The Ponzi scheme resulted in a loss of about $7 billion for more than 18,000 investors, who have yet to receive any compensation for their loss. It is reported that many of Stanford’s clients were retirees whom he promised safe investments. He was convicted of 13 felony counts in 2012.
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Vijay Mallya
Mallya was a prominent Indian liquor tycoon known for his high-flyer lifestyle. He also owned Kingfisher Airlines. However, in 2012, it was revealed that he took out several loans from banks to keep his airline business afloat. After Mallya failed to make the required payments, he fled to the U.K. from India. The Indian government and banks are still making legal efforts to extradite him. He is being charged with bank fraud and money laundering.
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Bernie Madoff
Madoff is credited with running the biggest Ponzi scheme ever. He is currently serving a 150-year federal prison sentence. Last year, he applied for compassionate release on the grounds that he had less than two years left to live because of kidney failure. However, his request was denied. Madoff was a financial industry veteran who started Bernard L. Madoff Investment Securities LLC in 1960 and even served as a chairman of NASDAQ.
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Patricia Kluge
Kluge invested a massive amount of money, which she got from her high-profile divorce settlement, into a vineyard. After the crash of the housing market, she lost all the money. She even had to auction all her fine jewelry and other possessions to save herself from bankruptcy. However, it didn’t work, and in June 2011, Kluge filed for Chapter 7 bankruptcy.
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Elizabeth Holmes
Holmes was once regarded as a rising Silicon Valley star, but she is now facing fraud charges. Theranos, the blood-testing company she founded, claimed to revolutionize the way patients are tested and treated for diseases. In reality, the company was nowhere close to delivering the technology it promised. In 2015, Forbes named her the youngest and wealthiest self-made female billionaire, but the next year, after the revelation about her technology, Forbes revised her net worth to zero.