MC Hammer - Bankruptcy, Lawsuits and Media Reaction

Bankruptcy, Lawsuits and Media Reaction

Contrary to public rumor, Hammer claimed he was really never "down-and-out" as reported by the media (eventually expressed on The Opie & Anthony Show and The Ellen DeGeneres Show in 2009). Originally having an estimated net worth of over $33 million dollars according to Forbes Magazine, speculations about Hammer's status first emerged during delays between albums Too Legit to Quit and The Funky Headhunter, with Hammer having spent much of his money on staff and personal luxuries.. Regardless, people were getting bored with Hammer's image and "hardcore rap" was on the rise (with Hammer making an effort to adapt to the ever-changing landscape of hip hop in the process). In addition to excessive spending while supporting friends and family, Hammer ultimately became $13 million in debt. With dwindling album sales, unpaid loans, a large payroll and a lavish lifestyle, Hammer eventually filed for bankruptcy in April 1996 at a California court.

Hammer's mansion was sold for a fraction of its former price. "My priorities were out of order," he told Ebony. He claimed, "My priorities should have always been God, family, community, and then business. Instead they had been business, business, and business." Along with Felton Pilate and other group members, Rick James sued Hammer for infringement of copyright, but the suit was settled out of court when Hammer agreed to credit James as co-composer, effectively cutting James in on the millions of dollars the record was earning. By the late 1990s, though, Hammer seemed to stabilize himself and made himself ready to undertake new projects.

In 1992, Hammer had admitted in depositions and court documents to getting the idea for the song "Here Comes The Hammer" from a Christian recording artist in Dallas, Texas named Kevin Christian. Christian had filed a 16 million dollar lawsuit against Hammer for copyright infringement of his song entitled "Oh-Oh, You Got The Shing". This fact, compounded with witness testimony from both Hammer's and Christian's entourages, and other evidence (including photos), brought about a settlement with Capitol Records in 1994. The terms of the settlement remain sealed. Hammer settled with Christian the following year.

In 1997, just prior to beginning his ministry, M.C. Hammer (who by that time had re-adopted "M.C.") was the subject of an episode of The Oprah Winfrey Show and the VH1 series Behind the Music (music from his album V Inside Out was featured in this documentary). In these appearances, Burrell admitted 'that had already used up most of fortune of over $20 million, proving that money is nothing if it doesn't bring peace and if priorities are wrong'. He would go on to express a similar point in other interviews as well.

During numerous interviews on radio stations and television channels throughout the years, Hammer was constantly questioned about his bankruptcy. For example, during an interview by WKQI-FM (95.5) for the promotion of his "Pioneers Of Hip Hop 2009" gig at the Fox Theatre (Detroit, Michigan) which featured 2 Live Crew, Naughty by Nature, Too Short, Biz Markie & Roxanne Shanté, Hammer was asked about his finances by the "Mojo in the Morning" host. Hammer responded on Twitter that Mojo was a 'coward' and threatened to cancel commercials for his upcoming show.

In December 2011, it was reported that Hammer owed the Internal Revenue Service $779,585 in back taxes from his earnings dating back to 1996 to 1997, during the years Hammer was believed to be facing his worst financial problems. After years of public and media ridicule regarding his finances, Hammer assured fans and 'naysayers' via Twitter, that he had proof he already took care of his debt with the IRS. "700k … Don’t get too excited .. I paid them already and kept my receipt. Stamped by a US Federal Judge”, Hammer Tweeted from his account @MCHammer.