Famous Celebrity Bankruptcies James "J.T." Taylor, born in South Carolina in 1953,  was the lead singer of Kool and the Gang, well known for hits such as Ladies Night and Celebrate!

There's a party goin' on right here.
A celebration to last throughout the years.
So bring your good times, and your laughter too.
We gonna celebrate your party with you.

Taylor joined Kool and the Gang, in 1978 and a year later, was the lead singer.

He declared bankruptcy. But one of his creditors was Polygram records who questioned the debts given that the contracts were unusual in that they were for personal services. James Taylor was, after all, one of a kind.The individual singers had formed a corporation, Quintet Associates, Inc. They also created Fresh Start Music, Inc. through which song publishing was funnelled. Road Gang Enterprises, Inc.  was formed to furnish the group's services in connection with concerts and tours. T.W.M. Management Services Ltd. was created to act as primary holding company, to receive all of the income of the Kool And The Gang, and to pay the individual musicians.

There was a quagmire of holding companies and contracts to sort out. Welcome to Hollywood. The problem was that the musicians eventually owed over 42-million as loans on advances made to them from time to time. They were taking out much more than what was going in. They were spending $339K a month.

By 1986, the total debts were over $1.7-million. Taylor had personally guaranteed most of them. Still Polygram advanced Kool and the Gang $1.1-million in 1986-1987, the second advance, Kool and the Gang had begged for through their manager.TJ Taylor

When the group held its regular business meeting in December of 1987, they were told that their debt had reached $3.3-million. Foreclosures had begun against individual group member's residence.

Taylor bailed. He quit the band and declared bankruptcy. Polygram opposed the bankruptcy petition believing that Taylor had it in him to pay his debts through a solo career.

The lawyers met in United States Bankruptcy Court in 1998, before Justice William Tuohey who sided with Taylor. Let the man be cleansed, he decided:

"(T)he motions of PolyGram … to dismiss the pending bankruptcy proceeding … are denied."

Polygram appealed to the United States Court of Appeals, but the appeal was dismissed.

Come on now, celebration.
We gonna celebrate and have a good time
Baby, we're gonna have a good time tonight.
Let's celebrate, it's all right.

Circa 2011, JT Taylor still tours and still croons Kool and the Gang hits.