How exactly does someone lose a billion-dollar fortune? Could you handle going from billionaire to zero? 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 9 Billionaires Who Lost Their Fortunes
9: Bjorgolfur Gudmundsson
In the aftermath of Iceland’s credit crisis in 2008, this former billionaire’s $1.1 billion net worth vanished. He was a substantial shareholder in the bank Landsbankin, which went bankrupt. When it went down, so did Gudmundsson’s assets. Gundmundson was the owner of the West Ham United Football Club. After his fortunes faded he was forced to sell the team.
8: Sean Quinn
Sean Quinn, who had a net worth of $6 billion in 2008, was the richest man in Ireland at the time. He declared bankruptcy three years later. Quinn put a quarter of his family’s fortune, or $2.8 billion, into the Anglo Irish Bank. Unfortunately he made the grave error of borrowing the money for the investment from his own insurance company. Anglo Irish Bank nearly collapsed during the recession and financial crisis of 2008. This put Quinn billions of dollars in debt and caused him to have to relinquish control of his company. This whole mess could have been avoided had Quinn not invested money controlled by his insurance company and if he had been paying attention to the financial pulse of his country.
7: Patricia Kluge
After nine years of marriage, Patricia Kluge divorced her husband, John Kluge, the founder of Metromedia. She acquired a 200-acre estate and $1 million per year as part of the divorce settlement. She was bankrupt by 2011. She’d invested all of her savings in a vineyard she’d purchased near her home. She took on too much debt to expand and then the real estate crash happened. Her property was foreclosed on. Donald Trump ended up buying her vineyard for $6.2 million.
6: Allen Stanford
Allen Stanford is a former prominent financier who is serving a 110-year prison sentence after being convicted on charges that his investment company was a giant Ponzi scheme and fraud. He was the Chairman of the Stanford Financial Group and was charged with masterminding a conspiracy to bilk investors out of the money. The SEC charged Allen Stanford with “massive ongoing fraud” centered on an eight-billion-dollar investment scheme. The SEC said that Stanford misappropriated billions of dollars of investors’ money, and falsified the Stanford International Bank’s records to hide their fraud.
5: Vijay Mallya
Vijay Mallya was a liquor tycoon and billionaire known for his lavish lifestyle and extravagant partying. He also owned the now-defunct Indian airline, Kingfisher Airlines. In 2012, it was revealed that Mallya had racked up some crazy debt trying to keep his airline in business. He defaulted on payments and the Indian banks he had borrowed from came knocking. Luckily for Mallya, he had a diplomatic passport since he was a member of the upper house of Parliament in India. Using that passport, he fled to the UK. Banks and the government have been trying to extradite him on bank fraud and money laundering charges totaling about $1.3 billion for several years.
4: Elizabeth Holmes
It wasn’t all that long ago that Stanford dropout Elizabeth Holmes was celebrated for her revolutionary blood-testing method and her startup, Theranos. As we all know now, it was all basically a sham, and Holmes, who was once worth $4.5 billion, is facing myriad lawsuits. Theranos went under and her fortune disappeared.
3: Eike Batista
In 2012, Batista was worth $30 billion, making him the richest person in Brazil and the seventh wealthiest person in the world. By 2013, his net worth was “just” $200 million and falling rapidly. By January of 2014, Batista had a negative net worth. More than $30 billion evaporated in less than two years. His descent into poverty can be traced back to the severe downturn in the mining industry and the catastrophic collapse of Batista’s OGX, which claimed it would pump 750,000 barrels of oil a day – only to find itself pumping 15,000.
2: Bernie Madoff
Bernie Madoff was the mastermind behind the world’s largest Ponzi scheme. Thousands of investors and charities lost money as a result of his Ponzi scheme. Madoff’s clients believed they had control of $65 billion at the time of his arrest. The statements they had been receiving were fake. More than 15,000 claims were filed against Madoff. At the time of his death, he was serving a 150-year prison term in federal prison for his offenses related to his Ponzi scheme. Bernie Madoff died in prison on April 14, 2021, at the age of 82 with a net worth of a negative $17 billion.
1: Aubrey McClendon
Aubrey McClendon was the co-founder of Chesapeake Energy, an oil and gas company. He was a pioneer of the fracking industry. McClendon’s 30-year career rose and fell a number of times. He made billions. He was part-owner of the NBA’s Oklahoma Thunder. On March 1, 2016, a federal grand jury indicted McClendon for violating antitrust laws. He was accused of conspiring to suppress the prices of leases for oil and natural gas sites by rigging the bidding process. The indictment charged him with orchestrating a conspiracy in which two companies colluded to not bid against each other for the purchases of leases in Oklahoma starting in December 2007 and continuing through March 2012. The indictment states that the companies would decide ahead of time who would win bids, with the winner then allocating an interest in the leases to the other company. After the indictment, McClendon released a statement denying all charges.
The following day, McClendon drove his SUV into a bridge at a speed of 88 mph. He was not wearing a seat belt. His SUV burst into flames.