Economic downturns, bad investments, fraud cases, and spending too much are the common reasons of their downturn
There is a saying, "Money comes and goes," which is at least right for some billionaires as they were declared bankrupted at one point in their lives, either personally or on their companies.
Economic downturns, bad investments, fraud cases, and spending too much are the common reasons of their downturn. While some of them could return as rich as they once were, some failed to regain it.
Here are five famous billionaires who have declared bankruptcy:
Only at the age of 28, Vijay Mallya became India's richest liquor king after taking over his father's mid-sized company. He turned that business into a multi-billion dollar firm, making a personal fortune of $1.5 billion.
However, troubles began when debt started to pile on his now-defunct Kingfisher Airlines. At the beginning of 2012, he fell on hard times after his now-defunct airline racked up debts of more than $1 billion.
From being a billionaire, Mallya quickly escalated down to a criminal when, he fled India to the United Kingdom with that debt.
Later, twelve state-owned Indian banks petitioned for Mallya to be declared bankrupt over unpaid debts and took the tycoon to a London court.
The UK government ordered the ex- billionaires' extradition in February 2019.
To avoid extradition to India, he applied for asylum in the UK on humanitarian grounds.
Seán Quinn, an Irish businessman, started a multi-billion pound business empire by selling gravel quarried from his family's farm in Derrylin. However, the recession of 2008 forced him, the once richest man in Ireland, to declare bankruptcy.
Taxpayers bailed out his stakes in Anglo Irish Bank and the government took over the bank, and thus began a series of legal troubles between the Quinn family and the bank. Quinn lost a majority of his $2.8 billion fortune. Trouble became intense when the Irish Bank Resolution Corp, which took over Anglo Irish Bank, said Quinn owed the bank more than €2 billion.
With multiple liquidation litigation cases, corporate fines, and fraud, Quinn filed for personal bankruptcy in 2011. However, the former billionaire businessman was discharged from bankruptcy in 2015 on condition of paying 10,000 euros a year for the next two years from any income he receives in the future.
American inventor and entrepreneur Elizabeth Holmes became the youngest self-made female billionaire in 2015 after her blood-testing start-up Theranos gained $9 billion in valuation.
She was named in TIME's 100 most influential people of 2015 and became an instant celebrity.
However, all came crashing down when the shortcomings and inaccuracies of the company's technology were exposed, along with the role Holmes played in covering it all up.
As a result, Holmes was ousted as CEO and charged with "massive fraud," and the company was forced to close its operations altogether.
If convicted, Holmes could face up to 20 years in prison.
Though US President Donald Trump himself has never declared bankruptcy, a number of his companies went bankrupt over the years.
Trump's Taj Mahal casino in Atlantic City declared bankruptcy in 1991 after "defaulting on interest payments to bondholders as his finances went into a tailspin."
According to the Washington Post, his two other casinos including Plaza Hotel in New York have similarly declared bankruptcy.
PolitiFact also discovered two previously unknown bankruptcies filed by Trump — one for Trump Hotels and Casinos Resorts in 2004, which had gone into $1.8 billion in debt, and another for Trump Entertainment Resorts in 2009.
However, Trump doesn't seem to be bothered by his lengthy history of bankruptcies.
In 2016, while partaking in a Republican presidential debate, Trump said: "I have used the laws of this country — just like the greatest people that you read about every day in business have used the laws of this country, the chapter laws, to do a great job for my company, for myself, for my employees, for my family, et cetera."
Eike Batista, a Brazilian businessman, made and then lost a multi-billion-dollar fortune in the mining and oil exploration industry over two decades.
Batista became the 8th richest person on the globe and the richest in Brazil in 2011, with $30 billion of personal wealth.
His downfall began after a sudden collapse in the mining industry and one of his most significant companies, OGX.
In 2013, Forbes reported that Batista lost nearly $20 billion in just one year alone. Thus, he was forced to file for bankruptcy.
A year later, his wealth took a massive fall from $200 million to negative wealth because of his massive debt and continuously falling company stock.
In January 2017, Batista was arrested by Brazilian authorities in a high-profile $100 million money laundering case, known as operation Car Wash.
On 24 March, 2020, it was announced that Batista would serve four years in prison, pay back $160 million, and collaborate with prosecutors.
The article was prepared based on information from the Business Insider and other international sources.