8 of Your Childhood Heroes Filed for Bankruptcy

By Joe Epstein on 16 April 2014 0 comments

Every schoolchild learns about Abraham Lincoln's Emancipation Proclamation, but few hear about his earlier declaration…for bankruptcy. And Honest Abe's not the only role model to have filed. Some of our most successful businessmen, celebrated creatives, and upstanding philanthropists have at one time gone up for Chapter 11. Some have even come back from bankruptcy.

For many adults, these examples of financial stumbles may be just as important — whether for motivation, or warning — as the success stories they learned as children, so enjoy being thoroughly surprised at which high and mighty icons hit rock bottom. (See also: Frugal Celebrities Who Live Large on a Small Budget)

1. Abraham Lincoln

Thirty years before being sworn into the presidency in 1861, a young Lincoln nearly lost it all buying a small general store in New Salem, Illinois. After he and a partner bought inventory on credit and then faced dismal sales, Lincoln was slapped with $1,000 in back payments when his partner died. He would spend the next seventeen years paying off the debt, including suffering through a court ruling forcing him to hand over his horse.

2. Stan Lee

Even after creating Spider Man, The X-Men, and Iron Man, 2001 saw the Marvel godfather nearly wind up in debtor's irons himself. After creating Stan Lee Media three years prior, Lee was forced to file for Chapter 11 when his partners Peter Paul and Stephan Gordon pleaded guilty to stock manipulation. Lee himself wasn't implicated in the web.

3. Oscar Schindler

Before his employment practices made him a hero, the German industrialist spent a year bankrupt and unemployed after two successive businesses he worked at (his father's farm machinery company and Moravian Electrothechnic) went under. Amazingly, he would go on to file for bankruptcy again in 1957, after saving over 1000 Jews from the hands of the Nazis. Supported partially by relief organizations for his wartime heroics, Schindler moved to Argentina, where he started a farming operation that would quickly prove unworkable.

4. Mark Twain

Turns out Samuel Clemens should have followed Huck Finn's advice and charged more for painting fences. As much as America's preeminent satirist made through writing, he lost through investing, most notably on the Paige Compositor, a typesetting machine into which Clemens sunk $300,000 before it was promptly made obsolete by the Linotype. He filed for bankruptcy in 1894 to free him from substantial debts, which, to his extreme credit, he eventually repaid anyway with revenue made from a world lecture tour. His travels also inspired the great Following The Equator. (See also: Make Money While You Travel)

5. Johnny Unitas

The square-jawed, buzz-cut, stoic to Joe Namath's flamboyant celebrity, Unitas would seem immune to the investment missteps plaguing so many less pragmatic professional athlete. Or not. The former Colts quarterback filed for bankruptcy in 1991 after a string of ill-advised plays at bowling alleys and restaurants proved too much.

6. Walt Disney

Five years before he first drew that famous set of mouse ears, Disney was forced to tuck his own tail between his legs in a 1923 bankruptcy filing. Though his Laugh-O-Gram Studios produced much-loved cartoons in the Kansas City area, profits proved insufficient to cover the cost of his employees, and Walt was forced to file, close-up shop, and move to Hollywood to try his luck again.

7. Donald Trump

OK, so "The Donald" isn't necessarily celebrated in the history books. But he is an icon of American success, wealth, and entrepreneurialism. So it may be surprising to learn that he's actually filed for Chapter 11 twice for his casino operations: once in 1992, and then again in 2004. (See also: How to Build Wealth Like Donald Trump)

8. P.T. Barnum

What child isn't mesmerized by the circus? The answer would "most of them," if a resilient Phineas Taylor Barnum hadn't gotten back on the horse (…elephant?) after finding himself in half a million dollars' worth of debt following a series of disastrous real estate investments around Bridgeport, Connecticut. After Barnum filed in 1856, he spent the next five years crawling back, mainly by lecturing around England. By 1871, he found himself in good enough standing to enter the circus business with Barnum's Grand Traveling Museum, and eventually merge with competitor James A. Bailey to create The Barnum and Bailey circus. (See also: How to Embrace Failure and Win)

So, like all tales of bankruptcy and redemption, the "greatest show on earth" wouldn't have come into being without a great show of grit.

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