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7 Wildly Successful People Who Survived Bankruptcy

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While being unable to pay one's creditors is never a good situation for a company or an individual, it may not be the financial kiss of death that you might think. A number of successful people have found themselves overextended and ended up filing for bankruptcy, only to successfully stick it out and find firmer financial footing again. Here are a few famous people who were once strapped for cash.

1. ABRAHAM LINCOLN

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His face may now appear on the penny, but at one time, Lincoln didn't have a single cent to spare. Lincoln tried many occupations as a young man, including buying a general store in New Salem, Illinois, in 1832. While he may have been terrific at splitting rails, winning debates, and wearing stovepipe hats, Honest Abe wasn't much of a shopkeeper. Lincoln and his partner started buying out other stores' inventories on credit, but their own sales were dismal. As the store's debts mounted, Lincoln sold his share, but when his partner died, the future President became liable for $1000 in back payments. Lincoln didn't have modern bankruptcy laws to protect him, so when his creditors took him to court, he lost his two remaining assets: a horse and some surveying gear. That wasn't enough to foot his bill, though, and Lincoln continued paying off his debts until well into the 1840s.

Lincoln's not alone in the annals of bankrupt commanders-in-chief, though. Ulysses S. Grant went bankrupt after leaving office when a partner in an investment-banking venture swindled him. Thomas Jefferson filed for bankruptcy several times, including after leaving office, possibly because he threw around a lot of cash on food and wine. William McKinley went bankrupt while serving as Ohio's governor in 1893; he was $130,000 in the red before eventually straightening out with the help of friends. He won the White House just three years later.

2. HENRY FORD

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Despite his reputation as one of the most important innovators and entrepreneurs of the late 19th and early 20th centuries, Henry Ford was no stranger to debt. In 1899 the young mechanic and engineer started the Detroit Automobile Company with the backing of three prominent politicians. Ford hadn't quite mastered the production techniques that would eventually make him rich, though. Over the next two years, Ford proved to be too much of a perfectionist, and his plant only produced 20 cars as he painstakingly tinkered with designs. The enterprise went bankrupt in 1901 and reorganized into the Henry Ford Company later that year. Ford eventually left that group and finally got things right in 1903, when he founded the Ford Motor Company. Things didn't go so badly for the Henry Ford Company after he left, either. It changed its name to one you might find a bit more recognizable: the Cadillac Automobile Company.

Ford wasn't the only auto magnate who knew how bankruptcy felt. General Motors founder William Crapo Durant took a massive hit during the Great Depression that saw his fortune fall from $120 million to bankruptcy. He spent his last few years running a bowling alley in Flint, Michigan.

3. WALT DISNEY

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His name may be a stalwart brand today, but early in his career, Disney was just a struggling filmmaker with too many bills. In 1922, he started his first film company with a partner in Kansas City. The two men bought a used camera and made short advertising films and cartoons under the studio name Laugh-O-Gram. Disney even signed a deal with a New York company to distribute the films he was producing. That arrangement didn't work out so well, though, as the distributor cheated Disney's studio. Without the distributor's cash, Disney couldn't cover his overhead, and his studio went bankrupt in 1923. He then left Kansas City for Hollywood, and after a series of increasingly successful creations, Disney debuted a new character named Mickey Mouse in 1928.

4. MILTON HERSHEY


Milton Hershey always knew he could make candy, but running a successful business seemed just out of his reach. Although he never had a formal education, Hershey spent four years apprenticing in a candy shop before striking out on his own in Philadelphia in 1876. Six years later, his shop went under, as did a subsequent attempt to peddle sweets in New York City. Hershey then returned home to Lancaster, Pennsylvania, where he pioneered the use of fresh milk in caramel production and founded the successful Lancaster Caramel Company. In 1900, he sold the caramel company for $1 million so he could focus on perfecting a milk chocolate formula. Once he finally nailed the recipe, he was too rich (and too flush with delicious chocolate) for anyone to remember the flops of his early candy ventures.

5. BURT REYNOLDS

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Burt Reynolds was one of Hollywood's biggest stars of the 1970s. Unfortunately, he spent money like his career would never hit a downswing. He owned mansions on both coasts, a helicopter, and a lavish Florida ranch. Gradually, his financial situation got grimmer as he made poor career choices and weathered a pricey divorce from Loni Anderson. By 1996, the Bandit owed $10 million to his creditors, and the royalties from Cop and a Half just weren't flowing in quickly enough. Reynolds declared Chapter 11 bankruptcy, from which he emerged in 1998.

Not only did he not have to sell his trademark mustache at auction to pay his bills, Reynolds even got to keep his Florida estate, Valhalla. This homestead exemption raised the ire of some observers who didn't think hanging on to a $2.5 million mansion while writing off $8 million in debt was quite in the spirit of bankruptcy laws' provisions about keeping one's home. In fact, when the Senate passed measures tightening these loopholes in 2001, Reynolds' keeping his ranch was one of the examples they used to decry bankruptcy proceedings as going too easy on the wealthy. "There is no greater bankruptcy abuse than this," said Wisconsin Senator Herb Kohl.

6. H.J. HEINZ


When Heinz was just 25 years old, he and two partners began a company that made horseradish. As the legend goes, the spicy root was the first of Heinz's famed 57 varieties, but it wasn't as lucrative as he'd hoped. A business panic in 1875 bankrupted his enterprise, but Heinz's passion for condiments remained strong. The very next year, Heinz got together with his brother and a cousin to start a new company in Pittsburgh. The reorganized group started making ketchup, and the business took off. Last year the H.J. Heinz Company had over $10 billion in revenue.

7. P.T. BARNUM

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Famous showman P.T. Barnum was always quick with a quip, but he wasn't so snappy about paying back his loans. Although he was successful showing off oddities in New York and around the globe, Barnum had a habit of borrowing cash from anyone who would open their wallet for him. He'd use these funds to buy real estate, particularly around Bridgeport, Connecticut, where he was trying to foster industrial development. Unfortunately for Barnum, he went too far with borrowed cash, and in 1855, things bottomed out. Barnum was bankrupt and owed his creditors nearly half a million dollars. Barnum didn't give up, though, and he slowly worked himself out of debt over the next five years. The showman gave lectures around England about showmanship and making money, and he regained control of his main attraction, The American Museum in New York City, in 1860. In 1871, just a few months shy of his 61st birthday, Barnum entered the circus business with Barnum's Grand Traveling Museum, Menagerie, Caravan, and Circus, which raked in over $400,000 in its first year.

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Man Buys Two Metric Tons of LEGO Bricks; Sorts Them Via Machine Learning
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iStock // Ekaterina Minaeva

Jacques Mattheij made a small, but awesome, mistake. He went on eBay one evening and bid on a bunch of bulk LEGO brick auctions, then went to sleep. Upon waking, he discovered that he was the high bidder on many, and was now the proud owner of two tons of LEGO bricks. (This is about 4400 pounds.) He wrote, "[L]esson 1: if you win almost all bids you are bidding too high."

Mattheij had noticed that bulk, unsorted bricks sell for something like €10/kilogram, whereas sets are roughly €40/kg and rare parts go for up to €100/kg. Much of the value of the bricks is in their sorting. If he could reduce the entropy of these bins of unsorted bricks, he could make a tidy profit. While many people do this work by hand, the problem is enormous—just the kind of challenge for a computer. Mattheij writes:

There are 38000+ shapes and there are 100+ possible shades of color (you can roughly tell how old someone is by asking them what lego colors they remember from their youth).

In the following months, Mattheij built a proof-of-concept sorting system using, of course, LEGO. He broke the problem down into a series of sub-problems (including "feeding LEGO reliably from a hopper is surprisingly hard," one of those facts of nature that will stymie even the best system design). After tinkering with the prototype at length, he expanded the system to a surprisingly complex system of conveyer belts (powered by a home treadmill), various pieces of cabinetry, and "copious quantities of crazy glue."

Here's a video showing the current system running at low speed:

The key part of the system was running the bricks past a camera paired with a computer running a neural net-based image classifier. That allows the computer (when sufficiently trained on brick images) to recognize bricks and thus categorize them by color, shape, or other parameters. Remember that as bricks pass by, they can be in any orientation, can be dirty, can even be stuck to other pieces. So having a flexible software system is key to recognizing—in a fraction of a second—what a given brick is, in order to sort it out. When a match is found, a jet of compressed air pops the piece off the conveyer belt and into a waiting bin.

After much experimentation, Mattheij rewrote the software (several times in fact) to accomplish a variety of basic tasks. At its core, the system takes images from a webcam and feeds them to a neural network to do the classification. Of course, the neural net needs to be "trained" by showing it lots of images, and telling it what those images represent. Mattheij's breakthrough was allowing the machine to effectively train itself, with guidance: Running pieces through allows the system to take its own photos, make a guess, and build on that guess. As long as Mattheij corrects the incorrect guesses, he ends up with a decent (and self-reinforcing) corpus of training data. As the machine continues running, it can rack up more training, allowing it to recognize a broad variety of pieces on the fly.

Here's another video, focusing on how the pieces move on conveyer belts (running at slow speed so puny humans can follow). You can also see the air jets in action:

In an email interview, Mattheij told Mental Floss that the system currently sorts LEGO bricks into more than 50 categories. It can also be run in a color-sorting mode to bin the parts across 12 color groups. (Thus at present you'd likely do a two-pass sort on the bricks: once for shape, then a separate pass for color.) He continues to refine the system, with a focus on making its recognition abilities faster. At some point down the line, he plans to make the software portion open source. You're on your own as far as building conveyer belts, bins, and so forth.

Check out Mattheij's writeup in two parts for more information. It starts with an overview of the story, followed up with a deep dive on the software. He's also tweeting about the project (among other things). And if you look around a bit, you'll find bulk LEGO brick auctions online—it's definitely a thing!

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How Experts Say We Should Stop a 'Zombie' Infection: Kill It With Fire
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Cs California, Wikimedia Commons // CC BY-SA 3.0

Scientists are known for being pretty cautious people. But sometimes, even the most careful of us need to burn some things to the ground. Immunologists have proposed a plan to burn large swaths of parkland in an attempt to wipe out disease, as The New York Times reports. They described the problem in the journal Microbiology and Molecular Biology Reviews.

Chronic wasting disease (CWD) is a gruesome infection that’s been destroying deer and elk herds across North America. Like bovine spongiform encephalopathy (BSE, better known as mad cow disease) and Creutzfeldt-Jakob disease, CWD is caused by damaged, contagious little proteins called prions. Although it's been half a century since CWD was first discovered, scientists are still scratching their heads about how it works, how it spreads, and if, like BSE, it could someday infect humans.

Paper co-author Mark Zabel, of the Prion Research Center at Colorado State University, says animals with CWD fade away slowly at first, losing weight and starting to act kind of spacey. But "they’re not hard to pick out at the end stage," he told The New York Times. "They have a vacant stare, they have a stumbling gait, their heads are drooping, their ears are down, you can see thick saliva dripping from their mouths. It’s like a true zombie disease."

CWD has already been spotted in 24 U.S. states. Some herds are already 50 percent infected, and that number is only growing.

Prion illnesses often travel from one infected individual to another, but CWD’s expansion was so rapid that scientists began to suspect it had more than one way of finding new animals to attack.

Sure enough, it did. As it turns out, the CWD prion doesn’t go down with its host-animal ship. Infected animals shed the prion in their urine, feces, and drool. Long after the sick deer has died, others can still contract CWD from the leaves they eat and the grass in which they stand.

As if that’s not bad enough, CWD has another trick up its sleeve: spontaneous generation. That is, it doesn’t take much damage to twist a healthy prion into a zombifying pathogen. The illness just pops up.

There are some treatments, including immersing infected tissue in an ozone bath. But that won't help when the problem is literally smeared across the landscape. "You cannot treat half of the continental United States with ozone," Zabel said.

And so, to combat this many-pronged assault on our wildlife, Zabel and his colleagues are getting aggressive. They recommend a controlled burn of infected areas of national parks in Colorado and Arkansas—a pilot study to determine if fire will be enough.

"If you eliminate the plants that have prions on the surface, that would be a huge step forward," he said. "I really don’t think it’s that crazy."

[h/t The New York Times]

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