Billionaires Who Lost Their Wealth to Bankruptcy

No matter how well established you may be there are always setbacks waiting for you at some point. If you are able to surpass and overcome them, it would not affect your financial status. However, if you have used illegitimate ways to earn wealth, have not planned and strategized wisely, or have become a victim of global financial crunches, chances are bright that you may go bankrupt. Take for example, our latest billionaire victim, Sam Bankman-Fried who literally lost 94% of his $14 billion wealth in one day with the collapse of his FTX crypto currency exchange in early November 2022.

One fine day, they woke up to the worst news of their lives- they had lost all their fortune. That’s definitely not a great feeling, right? But who can fight fate, right? Sam’s and other ex-billionaires literally lost their fortune. For some, it cost them more than just their wealth, but their lives and the lives of those closest to them. Let’s check out who are these unfortunate former billionaires who lost it all to bankruptcy.

Allen Stanford is on the top of our list of billionaires who are now bankrupt. Allen Stanford is a former financer who was able to make billions of dollars on his own. He was living an elite life, travelling in his private jets and vacationing on his yacht until he was convicted for the second biggest Ponzi scheme in history. Investigation revealed that Allen Stanford had misinformed around 50,000 investors and fraudulently gathered money. He sold approximately $7 billion of certificates of deposits from his offshore banks.

He, along with his associates, also had dealings with Mexican drugs cartels. Allen, 62 years old at the time was finally convicted in 2012 after a brief investigation that proved him to be fraudulent. He is now bankrupt and serving his 110 years sentence in prison as he was found guilty of 13 of 14 counts of fraud. Stanford’s bank account overseas was also seized in the amount of $330 million.

Aubrey McClendon was an American businessman, chief executive officer, and founder of American Energy Partners. He has multiple companies under his name. He also co-founded Chesapeake Energy and served as its CEO and chairman. He was best known for being an outspoken advocate for alternative energy sources and was more into sustainable energy. Aubrey was also a part-owner of the Oklahoma city thunder franchise by the National Basketball Association. He was a famous American billionaire, and his net worth was calculated at $1.2 billion. 

McClendon was living his luxury billionaire life when exposed for being involved in rigging bids for oil and gas leases. According to Forbes, he was one of the most reckless billionaires. Following the allegation of being involved in oil rigging cases, McClendon had a series of trials. Aubery died the very next day in a car accident after being proven guilty by the court. Many suspect it was suicide as he did not want to spend a single day in jail for his crimes.

Bernard Madoff is named one of the biggest fraudsters and financiers of America. Madoff’s name made it to the headlines for running the biggest Ponzi scheme in history. His net worth at the time of his conviction was calculated at $64.8 billion. After the investigation against Madoff, it was found that he was involved in defrauding thousands of investors to an amount exceeding tens of billions of dollars.

He began the Ponzi scheme in the early 1990s and successfully continued doing so for seventeen years without being caught. At one point, Madoff was the chairman of NASDAQ and was also known to be the pioneer of electronic trading. After trials and investigations, and on March 12, 2009 the court sentenced Madoff to 150 years in prison for money laundering, securities frauds, and multiple other felonies. In 2021, Madoff died in jail.

The Madoff family was truly cursed. Bernie’s two sons who essentially turned their father in for the long running ponzi scheme both died before he did. Mark Madoff, his eldest committed suicide on December 11, 2010. Mark was 46 years old. His brother, Andrew died at the age of 48 while undergoing cancer treatment, on September 3, 2014.

Elizabeth Holmes Next and the first American Bankrupt female Billionaires on our list is Elizabeth Anne Holmes. She is one of the billionaires who went straight from a net worth of$22 billion to $0. Elizabeth is a former biotechnology entrepreneur who was charged with a criminal felony. In, Holmes, who was just 19 years old, founded her own company by Theranos. By 2015 Holmes’s made it to the top 15 youngest and self-made billionaires of America when the net worth of her company was $9 billion. But shortly afterwards, the shortcomings, fraudulent practices and malpractices of Theranos’s technology were exposed, with Holmes being guilty of committing the fraud.

Elizabeth Holmes was then charged with the massive fraud case, and her company was forced to shut down. She is now on bail and reportedly married to Billy Evans, heir to Evan’s hotels. On January 3, 2022, of the 11 charges Holmes was found guilty on 4 counts of defrauding investors; 3 counts of wire fraud, and 1 of conspiracy to commit wire fraud. She was found not guilty on four counts of defrauding patients. She is awaiting sentencing and can face up to 20 years in prison. –

Eike Batista was once Brazil’s richest man and a multi-dollar billionaire. He spent most of his childhood in Brazil and moved to Europe for secondary education. He graduated from university in Germany in Metallurgy before returning to his homeland. By the age of 23, Batista had already founded the first of his companies. He was a serial entrepreneur who made a fortune in mining, oil, and gas. And it was the same business that made him lose all that money. In 2008 Forbes had his name in their list of the world’s wealthiest people, and by 2010, he had it to the top 10 wealthiest people in the world, according to Forbes.

He lost the title and fortune of a billionaire after five of the six companies he owned crashed in the markets. He was also convicted for committing felonies but ma, in the amount of $100 money laundering but he managed to clear his name multiple times until July 2018 when he was finally arrested and sentenced for 30 years in prison for bribing the governor of Rio de Janeiro and other officials in the amount of $16.5 million and money laundering charges against him.

Once the second richest man in Iceland and a billionaire whose lifestyle matched no other,  Bjorgolfur Gudmundsson is now broke. His story of going from being a billionaire to a net worth of zero is the largest bankruptcy ever filed in Icelandic history.

Bjorgolfur Gudmundsson served as the chairman and the owner of West Ham United. At one time, he was also the majority owner and the chairman of the Icelandic bank, Landsbanki, which was then the second-largest company in the country. His name was included in Forbes’s wealthiest people in the world in 2008, and by the year 2009,  Björgólfur declared his personal bankruptcy, owing $750m, $500m of which he owed to Landsbanki. This seems to have been the world’s biggest recorded personal bankruptcy. He was charged guilty with around 450 charges against him, including bookkeeping offences. The news revealed that he was part of the Panama scandal too.  

Jocelyn Wildenstein is yet another unfortunate case that went from being a billionaire to being broke in a short period. Jocelyn Wildenstein was an American socialite and a billionaire famous for having multiple surgeries. She had so many cosmetic surgeries that her facial features were modified completely to a catlike appearance. For the same reason, the media started naming her the cat woman and the lion queen. While her features and transformation are pretty obvious, Jocelyn denies ever getting any cosmetic surgeries.

The woman was known for having an extravagant lifestyle. Once her year telephone bill was calculated to be $60,000 per year, while the food and wine costs were $547,000. She was married to a billionaire and then divorced in 1999. The alimony amount from her divorce was $100 million each year for around 13 years and $2.5 billion for the divorce settlement. N 2018, the socialite had used up almost all of her money was filed for bankruptcy.

Vijay Mallya is a famous Indian businessman and a former member of the Indian parliament. Mallya was one of the wealthiest people of India who owned 17 Indian banks. He was also the owner of India’s leading private airline, Kingfisher Airlines, which is currently non-functional.

Vijay Mallya comes from a wealthy family and is the only son of his father’s first wife,  Indian entrepreneur Vittal Mallya, the ex-chairman of United Breweries Group– the largest spirits company in India. Due to his billionaire status and extravagant lifestyle, he was named the King of Good times. But in 2012, many of his companies were involved in financial scandals and controversies. In 2016, Mallya was accused of loan fraud by several banks n his country. Shortly afterwards, he fled the country and currently lives with children in the United Kingdom, with much of his possessions confiscated.

Next on our list is an Irish billionaire who lost all of his money and declared bankruptcy is, Sean Quinn. Sean Quinn is one of the self-made billionaires who started from scratch, made it to the top and faced a nasty fall. He had multiple investments and companies in various sectors like the health, hotel industry, plastics, etc. You name it, and Sean Quinn was already there. At the age of 14, he dropped out of school because he could not read and write. But then, with just a loan of £100, he started building his own business, which in future became known as the QUINN group.

The first business Sean Quinn started with was the sale of gravel from his family to the local farmers. In 2008 Forbes named him the wealthiest person in the Republic of Ireland but shortly afterwards, in 2011, he filed for bankruptcy.

Next on our list is somebody who had the fall and bankruptcy the worst way possible, and we will tell you why. Adolf Merckle was a German entrepreneur and a billionaire, and at one point, he was named the fifth richest person in Germany with a net worth of $9.2 billion. In the 1960s, Adolf Merckle took over his family business with 80 employees. Shortly afterwards, he founded Germany’s first generic drug manufacturing company, Ratiopharm. He also invested in the cement industry and German automobiles.

In 2008 the billionaire businessman faced liquidity shortages. He decided to sell his drug company to pay down the debts and, on the other side, took a loan from the bank to keep his automobile company’s shares afloat based on the assumption that Volkswagen shares would fall. However, the share prices went too high in just two days, resulting in a total loss of more than €500 million for Adolf. Due to the stress of being Bankrupt, Adolf committed suicide by throwing himself in front of a speeding train in 2009.

Like the others, Patricia Kluge was an American billionaire who lost all her possession and went from billionaire to bankrupt. She is not a self-made billionaire as most of her money came from her wealthy husband, John Kluge. A former soft porn actress and cloakroom girl who wooed her German billionaire media mogul husband by cooking him dinner and performing a belly dance on the dining table. But the marriage lasted only for a short time. Patricia Klug and her Husband John Kluge, got divorced in 1990 after nine years of marriage. With a wealthy husband, the divorce settlement was agreed be to $1million a year and many highly-priced properties.

After getting the money from her divorce settlement, in 1999 Patricia decided to invest her money into a winery, Kluge Estate Winery and Vineyard which only resulted in financial losses. To maintain her lifestyle Patricia also tried to sell her jewelry, and some of her friends, including Donald Trump, also wanted to help her, but nothing worked well for her, and she had to let go of all the money she possessed. Patricia owed the bank $23 million and tried to sell Albemarle Estate $100 million but the value of the estate was only $24 million eventually the estate was foreclosed by the bank and sold to Donald Trump for a $4 million.

Michael  Pearson is yet another self-made billionaire who embraced bankruptcy afterwards. Michael Pearson started working as a consultant at Valeant Pharmaceuticals and took over the company as its Chief Executive officer with time. During his tenure, it is said that the company made tremendous profits and his leadership helped the company to boost the stock prices by more than 1000%. It is reported that the company has been compensating Pearson handsomely and gave him a significant equity stake in the company as well.

IIn 2015 there were a series of controversies against the malpractices of the company, especially for the prices of their medicines. The company’s stocks fell down by 90 per cent, and as a result, Pearson’s net worth came down too. Though he had lost US$ 1 trillion worth of assets under him, he managed to save $175 million for himself.

Bernie Ebbers was a Canadian businessman and a billionaire. He was the co-founder and the chief executive officer of Worldcom and was convicted for the multiple frauds he committed. Under his leadership, WorldCom had a boost, grew rapidly but then collapsed in 2002. It is reported that there had been some considerable accounting irregularities in the company, making WorldCom accounting scandals one of the biggest accounting scandals of the United States.

Whether it was technical errors or deliberate actions, the company built by Bernie Ebbers collapsed with him being convicted for fraud and conspiracy. That resulted in the loss of US$ 11 billion in just a year. He was sentenced to 25 years in prison and died after serving 13 years while being in custody.

Next on our list is a bankrupt billionaire from China. Huang Wenji is known for doing a multi-million business by selling umbrellas. He was the head of China Jicheng Holdings, a company specialising in manufacturing umbrellas. It is reported that Huang Wenji made a whopping US $1.9 billion by selling umbrellas only. But the fairy luck was not on his side. In 2017 the stock market of Hong Kong crashed, which resulted in the company losing around 94 per cent of its shares. The company, China Jicheng Holdings, has been trying to recover the lost money but cannot do so. Owing to this whole tragedy, Wenji became bankrupt too.

Manoj Bhargava was just an ordinary man who drove a taxi on the Indian roads to be a part of one of the most elite clubs in the world. This one is also one of the billionaires who started from starch and struggled to work their way up. Manoj Bhargava was the founder of Vebture LLC, which produced energy drinks. With the passage of time and struggle, Manoj’s net worth with the company reached $4billion. The downfall was that there had been serious allegations against Manoj’s energy drinks to be a leading cause of heart attacks. With these allegations being proven, his company and personal assets went to an all-time low, and the businessman had to give up almost all of his wealth.

Ramesh Chandra is yet another real estate tycoon from India who unfortunately got bankrupt because of the downfall of the housing market in his native country. Chandra accumulated his wealth through well-thought-out real estate investments. Ramesh Chandra founded a real estate investment firm Unitech and built an empire from scratch worth USD 11 billion (200 crore INR). He amasses most of his fortune during the 1980s through building homes for middle-classes.

However, when the housing market crashed in India due to the economic recession of 2008, the IIT Kharagpur alum lost 5% of his wealth in repaying debts and investors. And after that, he got involved in a scandal with his son Sanjay. Due to this, shares of Unitech sank. Eight years later, the ex-billionaire was charged for cheating investors and was sentenced to a three-year jail term. 

Alberto Vilar is a former investment banker and co-founder of a US-based investment firm called Emilian. Vilar had billions of dollars before he went bankrupt. This resulted from two major events- one, the stock market crash in 2000 that reduced his wealth significantly.

The second event occurred 8 years later when Vilar was accused of stock fraud, wire fraud, and money laundering. He was sent to jail for ten years. Resultantly, Vilar lost his billionaire status. The owner of Amerindo Investment Advisors was sent to jail in 2005. The judge stated that Vilar tried to prevent repayment to his victims, two of whom died waiting to be repaid. In 2021, Alberto Vilar died at the age of 80 years old.

Nigerian billionaire Femi Otedola amassed a whopping USD 1.8 billion by investing in an oil firm, Forte Oil. He eventually became the owner of 75% of this petroleum and power-generating firm. In fact, his relentless efforts helped the company become one of the top oil firms in Nigeria and one of the country’s largest companies with more than 500 gas stations.

Otedola had a rewarding and profitable business venture, which was constantly growing, and he had become a billionaire within no time. With profits reaching an all-time high, Otedola’s future was pretty much safe. However, as they say, tragedy can strike any time. Otedola’s successful run came to an abrupt end in 2016-17. Forte Oil’s shares dropped significantly, which caused considerable financial damage to the owner.

“I had about 93 percent of the diesel market on my fingertips. All of a sudden oil prices collapsed and I had over one million tons of diesel on the high seas and the price dropped from $146 to $34,” revealed Otedola.

The company was eventually devalued, and its interest skyrocketed. Then Otedola lost more than USD 480 million in accruing interest and again lost $160 million after the stocks crashed. Nigerian currency devalued, further plummeting his net worth, making him lose all the wealth.

Olva Thon is a Norwegian real-estate developer. Forbes listed him as the 198th richest man in the world. Back in March 2013, his net worth was around USD 6 billion. In fact, Thon was the wealthiest person in Norway. And his Olav Than Group was the country’s largest private real-estate firm with around forty properties, including sixty hotels.

Thon is among the few ex-billionaires who are a part of this list but didn’t lose all their money for doing something illegal. Instead, he lost his wealth because he gave it all away to charity. According to Bloomberg Billionaires Index, he is the 473rd richest person in the world. He is the head of a charity foundation and donated his entire wealth to promote science, mathematics, and entrepreneurship in the country