Saturday, October 9, 2010

The Truth About Toni Braxton's Bankruptcy

The world wide web is buzzing over Toni Braxton's second bankruptcy. Rumors swirling around about her spending habits being the cause to yet another bankruptcy. However a reliable source close to the family says Braxton's Chapter 7 filing had nothing to do with her spending habits and everything to do with her Vegas deal gone wrong. And I believe it!

The relative tells TMZ that Toni took out "show insurance" through Lloyd's of London for her act at the Flamingo Las Vegas Hotel & Casino back in 2006.

And when Toni's
heart condition started to act up -- in the middle of the show's run -- she had to pull the plug, but she was still on the hook to the hotel for big bucks. Toni expected Lloyd's to cover the loss but Lloyd's didn't, arguing Toni had an undisclosed, preexisting medical condition, rendering the policy void.

In the end, Toni had to absorb a huge loss, which the relative claims sent her on a downward
financial spiral.

The R&B singer's lawyer, Debra Grassgreen, revealed Braxton is millions of dollars in debt.

"After months of trying to work out an acceptable arrangement with her principal creditors, she determined that the only way to assure that she could meet her tax obligations and provide for her two small children was to commence these bankruptcy cases," said Grassgreen in a statement Thursday.

Grassgreen says the 43-year-old singer was forced to cancel a series of Las Vegas shows in 2008 because of a heart condition. Doctors told her she was suffering from a type of angina.

The performer turned around and sued Lloyd's of London, which had insured her for the Las Vegas performances in case of cancellation. The insurer denied her claim, stating she had a pre-existing condition. The case was dismissed on Sept. 20.

Braxton will be selling some of her assets to pay off creditors and tax debts. Court documents show she owes somewhere between $10 million US and $50 million US.

The singer, who had big hits with Un-break My Heart, You're Makin' Me High and Breathe Again, previously filed for bankruptcy in 1998.

In 2008, she performed on Dancing With the Stars and in May of 2010 released her latest album Pulse via Atlantic Records. The singer is currently filming a reality show tentatively titled Braxton Family Values set to air on WE Network.


Cori Anson said...

It is unfortunate that no one can look at the circumstances and understand her situation. A sign of ignorance by anyone who critizes her or alludes that she caused this to happen. Like the last time, this will be fodder for the hounds but Toni will survive. Truly sad it had to come out around her birthday.

Anonymous said...

She must be retarded to blow all of her money a second time and end up in such debt. I was sad for her first time but the 2nd time I think it proves she might need a conservatorship like Britney Spears since she does not have any sense. It also might be too late for a comeback since she is old now (44 y.o) to make a comeback.

Amber W. said...

I'm just sad because this shouldn't be happening to such a big hearted-person like Toni. Although she may be to blame for her situation, there are others at play who contrubuted greatly to these obstacles. She's been through so much, I just want her to get through this and comeback to the music world refreshed.