For most people, building a fortune is an elusive task. But once they have a fortune, many people find that they have a hard time hanging onto it. Even the greatest of fortune is destined to be destroyed eventually. But the end comes sooner for some than for others. Very often, that end has nothing to do with with the individuals involved, but is just the vagaries of the world. 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. Economic downturns are hard on everyone. But for billionaires, they can be catastrophic. When people have that kind of money, it isn’t stored as cash in a safe somewhere. It is in the form of things like real estate and business holdings. Exactly how much money any given person is worth depends upon what other people think those holdings are worth. Those valuations can change by the day, hour, or even minute.
Here are the billionaires who went broke.
Elizabeth 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.
2. Patricia Kluge
Patricia 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.
3. Bernie Madoff
Bernie 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.
4. Vijay Mallya
Vijay 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 UK 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.
5. Allen Stanford
Allen Stanford is serving a 110-year sentence for running the second-biggest Ponzi scheme ever in the US. 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.
6. Sean Quinn
Sean 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.
7. 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 filed for bankruptcy.
8. Jocelyn Wildenstein
Jocelyn 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.
9. Björgólfur Gudmundsson
Björgólfur 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.
10. Aubrey McClendon
Co-founder of oil and gas company Chesapeake Energy, Aubrey 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.