Film producer Warren Zide best known for his hit movie “American Pie” has filed for Chapter 7 bankruptcy. Zide’s Chapter 7 bankruptcy petition did not list all of his specific debts; but it did list that he had $1 million to $10 million in liabilities and $518,630 in back taxes owed to the state of California. The fact that Zide filed Chapter 7 bankruptcy means that he does not make more than the median income in his state and that his debt and assets do not exceed the thresholds imposed by the bankruptcy code. The Zide bankruptcy is interesting in that while in many ways he is similar to other wage earners filing for Chapter 7 bankruptcy, he also owns assets such as copyrights, merchandise licensing deals and other intellectual property assets related to the movies he has produced that may be liquidated to pay creditors. However, Zide may still avail himself of the bankruptcy exemptions and may also have the opportunity to “buy back” some of his most valuable assets during bankruptcy with the help of an experienced bankruptcy attorney.
And while the details of Zide’s bankruptcy filing have not been disclosed yet, it is likely that this successful filmmaker overspent after his smash 1999 hit “American Pie” made millions and then found that his income had shrunk over the past 10 years. Unfortunately for celebrities such as Zide and even individuals who are not so famous, the unwillingness to make financial adjustments once income drops can lead them down the road of financial troubles. But with Chapter 7 bankruptcy, Zide will be able to discharge many of his debts, protect his most valuable assets and emerge from bankruptcy better positioned financially.