Michael Jackson was over $500 million in debt at time of death

The late singer reportedly owed a staggering amount of money at the time of his death, according to court documents.

Michael Jackson was reportedly drowning in a mountain of debt when he died in 2009.

Court documents filed in Los Angeles on June 21 and obtained by People Thursday claim the King of Pop owed more than $500 million ($A747.05 million) to more than 65 creditors just before he passed.

Jackson had “more than half a dozen lawsuits pending worldwide” and more than “65 creditors’ claims were filed in the estate spawning additional lawsuits, of which several resulted in litigation,” the petition states.

Per the new filing, Jackson’s executers were able to “renegotiate and restructure financing arrangements,” including a deal with Sony over rights he had to music publishing for several artists, at “substantially reduced interest rates” to avoid further losses and satisfy the debts.

The $750 million ($A1.120 billion) agreement allowed Sony to acquire Sony/ATV, which held the rights to almost 3 million famous songs from artists including John Lennon and Paul McCartney, David Bowie and Taylor Swift.

Late US popstar Michael Jackson was in staggering debt before he died. Picture: Carl De Souza/AFP

Despite settling those financial issues, Jackson’s estate reportedly still owes a significant amount of money as “there remain challenging business, tax and legal issues that the executers and their counsel continue to deal with,” according to the petition.

The filing reportedly also notes a pending final decision on a victory in a 2021 court battle with the IRS.

Jackson’s three children, Prince, 27, Paris, 26, and Bigi Jackson, 22 — who are the beneficiaries of his estate — have been blocked from receiving money from their trust until the IRS dispute has been settled.

Court documents Page Six previously obtained showed that a tax audit determined the estate was “issued a note of deficiency” because it “undervalued its assets” and owed “$US700 million in taxes and penalties.”

Prince Jackson, Paris Jackson and Bigi Jackson. Picture: John Phillips/Getty Images

However, a spokesperson for the estate previously downplayed what appeared in the filing, telling us, “In annual reports provided to the probate court, which are publicly available, anyone can see that the estate provides Michael’s mother and children with very substantial amounts of money to support them.

“The estate has a very cooperative relationship with Michael’s children and whenever they need anything, the estate works with them to ensure that they are very well taken care of, just as Michael would have wanted.”

In February, Sony Music put even more money back into the estate by reportedly buying the music superstar’s music catalogue — which includes hits like Beat It and Billie Jean — for at least $600 million ($A896.46 million).

Jackson’s spending habits were previously exposed. Picture: Bertrand Guay/AFP

The Los Angeles Times previously reported that Michael accrued so much debt largely in part because of his excessive spending habits.

Accountant William R. Ackerman reportedly testified in the Smooth Criminal singer’s wrongful death trial in 2013 that the latter dropped a lot of money on charity donations, gifts, travel, art and furniture.

Michael’s spending habits were put on display during his 2003 interview with Martin Bashir, in which he went on a shopping spree at an antique store in Las Vegas.

In March 2005, just three months before he died, prosecutors in his sex abuse trial dubbed him a “shopaholic” who was on the brink of bankruptcy.

This story originally appeared on New York Post and was reproduced with permission

Originally published as Michael Jackson was over $500 million in debt at time of death