Michael Jackson was close to bankruptcy at the time of his death in 2009, a banker testified on Tuesday in a tax trial the IRS filed against the singer's estate.
"He was on the edge," investment banker David Dunn said under oath in the U.S. Tax Court in Los Angeles. "He was desperately trying to figure out what he could do to address his financial crisis."
Dunn later testified that he was hired in 2007 to aide Jackson in recovering from the financial blow of his 2005 child molestation trial, adding that the singer often "undermined him at the last minute by signing unfavorable side deals that lured him in with upfront cash," the Daily News reports.
Jackson was still in a "very precarious situation" in early 2008, Dunn said, with more than $300 million in debt, his Neverland Ranch nearing foreclosure, and lavish spending habits to boot.
"We talked about his sadness in knowing he was never going to live in Neverland again," Dunn revealed. "It was the culmination of the molestation allegations, the culmination of recognizing the financial situation he was in."
The pair spoke just one month before Jackson's death, Dunn describing the heartfelt conversation to the court: "He talked about his young career and being at his peak. He was struggling with how to make a living and still be with his children, who were of paramount importance."
When Jackson's spending habits became uncontrollable, Dunn claimed Rev. Jesse Jackson even sat him down for a "lecture."
"He just said, 'Michael, this is you, you've got a bucket, and this tap here is your cash flow. . .We've got to put a bottom on your bucket, you have to stop spending,'" Dunn recounted. "Michael borrowed a lot of money, he knew he had financial issues. . .but the last thing he wanted to do was tour. He was looking for other things to generate income to avoid doing what he wound up agreeing to do."
Dunn said he ultimately resigned from his position in May 2009, claiming it was difficult to know "which way was up, which way was down," and that Jackson hadn't paid him in two years, raking up a whopping $300,000 debt.
The court battle first began in 2013 when the IRS claimed Jackson's estate had undervalued multiple assets, including the worth of MJ's likeness and image at the time of his death.
Should the IRS prove to be victorious in the case, Jackson's estate risks owing $700 million to $1 billion, according to reports.
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