According to an investment banker who testified on Tuesday in a tax trial against the singer, MJ was on the verge of bankruptcy before his 2009 death and the IRS is taking on his estate for up to $1 billion in unpaid taxes. The IRS also claims the singer’s estate has undervalued assets, but overseers of Jackson’s estate say the artist was virtually worthless at the time of his death and was millions in debt.
The New York Daily News reports that investment banker David Dunn took the stand in U.S. Tax Court, testifying, “He was on the edge. He was desperately trying to figure out what he could do to address his financial crisis.” Dunn added that Jackson remained in a “very precarious situation” in early 2008 with more than $300 million in debt, out-of-control spending habits and his lavish Neverland Ranch near foreclosure.
He told the court, “We talked about his sadness in knowing he was never going to live in Neverland again. It was the culmination of the molestation allegations, the culmination of recognizing the financial situation he was in.” The teller also says he resigned in May 2009 because it was hard to tell “which way was up, which way was down,” and Jackson hadn’t paid him in two years, despite owing him some $300,000.
Jackson’s estate maintains the singer was so tarnished by his child molestation trial and media coverage of his eccentric personal life that his image was virtually worthless when he died. However, if the judge finds the King of Pop’s estate has undervalued assets, the long-awaited trial could lead to a whopping $1 billion tax bill for Michael.