A Brief History Of Stephen Baldwin's Financial, Tax And Real Estate Problems

Stephen Baldwin wants to make one thing clear: He did not wash out of Hollywood. He walked away.

In a new interview with People, the 60-year-old actor gives a very interesting explanation for why he did not have a much bigger film career after the success of "The Usual Suspects." As he explains it:

"I probably could have pointed myself in the direction of becoming a big star. But that wasn't me. I didn't want to be Tom Cruise and have to make $100 million at the box office. I'd rather be a schmuck from Massapequa! I'm good at that!"

Righhhhht.

In my opinion, that explanation is somewhat reconstructing history.

When you look at Tom Cruise's career, he tends to star in a high-paying, big-budget action movie, followed by a high-brow, award-bait project helmed by a highly talented director. Then an action movie. Rinse, repeat.

For example, the year after "The Usual Suspects" was released, Tom Cruise starred in "Mission: Impossible" and "Jerry Maguire." For his next movie, Tom took a major pay cut for the chance to star in what turned out to be Stanley Kubrick's final movie, "Eyes Wide Shut." He actually took a pay cut again for his next movie, Paul Thomas Anderson's "Magnolia." And then in 2000, he made $100 million off the blockbuster success of "Mission: Impossible 2." That's the general Cruise cadence. Cruise control, if you will.

Stephen Baldwin certainly had some juice after "The Usual Suspects" (which is easily one of my top 5 favorite movies). So what project did he choose to pursue next? Capitalizing on all that newfound Hollywood heat?

Bio Dome.

(Photo by Metro-Goldwyn-Mayer/Getty Images)

And while I LOVED "Bio Dome" (I saw it in theaters because I was 14 at the time), I can understand why some might critique this Pauly Shore collab as maybe not the most strategic career choice. Even Stephen's brother, Alec Baldwin, warned him not to make it, predicting that it could destroy his career. As it turned out, "Bio Dome" was somewhat of a hit, making $13.4 million on its $8 million budget. It was also annihilated by critics, and Alec's prediction basically came true.

Stephen continued working steadily. But the quality, budgets, and visibility of his projects declined rapidly. His biggest subsequent studio role was playing Barney Rubble in 2000's "The Flintstones in Viva Rock Vegas." Unfortunately, that movie grossed only $59.5 million worldwide against an estimated $83 million budget.

Meanwhile, Stephen famously became a born-again Christian in the early 2000s, turning his attention toward ministry work, Christian films, and a traveling evangelical skateboarding program. Looking back, he sounds completely satisfied with the tradeoff.

"I've done 100 movies, I've made more money than I could have wildly imagined," Baldwin told People.

And maybe Baldwin truly never wanted to be Tom Cruise. But it is also fair to point out that Hollywood appears to have stopped asking before he formally walked away.

More importantly, if Stephen really did make more money than he ever imagined, what happened to it?

Because over the next decade, Baldwin experienced a remarkable series of financial problems involving two foreclosure battles, more than $2 million in debt, an unsuccessful bankruptcy, unpaid taxes, a criminal charge, and a lawsuit that could have delivered a life-changing windfall—but instead delivered nothing.

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The $515,000 New York House

In 1997, Stephen and his wife, Kennya, paid $515,000 for a home in Upper Grandview, New York. A few months before buying the home, Stephen and Kennya welcomed a baby girl, Hailey, who today is known as Hailey Bieber, thanks to her marriage to Justin Bieber.

Located in Rockland County, approximately 25 miles north of Manhattan, the four-bedroom, four-bathroom house measured roughly 3,100 square feet and sat on 1.4 acres overlooking the Hudson River.

The Baldwins subsequently borrowed heavily against the property. In 2000, they refinanced the house with an $812,500 mortgage and also took out an additional $250,000 loan.

By 2009, the house was underwater, and the Baldwins were in serious financial trouble.

The First Foreclosure Crisis

In June 2009, it was reported that Stephen and Kennya had defaulted on more than $824,000 owed to a mortgage holder. The house was scheduled to be sold at a public foreclosure auction.

The timing was not ideal.

Baldwin's days of appearing in major studio movies were largely behind him. He had spent much of the preceding decade working in independent films, direct-to-video productions, television movies, Christian entertainment, and reality shows such as "Celebrity Mole," "The Celebrity Apprentice," and "I'm a Celebrity…Get Me Out of Here!"

The scheduled auction did not immediately force the family out of the house. The Baldwins somehow managed to remain in the property for several more years.

But one month after the foreclosure headlines, Stephen revealed the full extent of his problems.

The $2.3 Million Bankruptcy

In July 2009, Baldwin filed for Chapter 11 bankruptcy protection.

Court filings showed that Stephen and Kennya owed more than $2.3 million. Their reported debts included:

• Approximately $1.2 million owed across two mortgages
• More than $1 million in federal and state tax liabilities
• Approximately $70,000 in credit card debt

The Upper Grandview home securing much of the mortgage debt was valued at approximately $1.1 million. So, the Baldwins owed more on the house than the property was worth, even before accounting for the tax and credit card debts.

Chapter 11 bankruptcy is typically intended to give a debtor time to reorganize, negotiate with creditors, and establish a repayment plan. In Baldwin's case, the process did not produce a successful restructuring or discharge.

In 2011, the bankruptcy case was dismissed after the IRS accused Baldwin of failing to comply with court requirements, failing to provide tax returns, and failing to disclose a potentially valuable lawsuit he had filed against Kevin Costner.

That lawsuit briefly appeared capable of solving all of Baldwin's financial problems.

The Kevin Costner Lawsuit

Following the 2010 Deepwater Horizon oil spill, BP needed technology capable of separating oil from contaminated water.

Conveniently, Kevin Costner had spent years investing in exactly that kind of technology through a company called Ocean Therapy Solutions. The company marketed large centrifuges designed to process oily water and separate the usable water from the contaminants.

For reasons I could not determine, Stephen and businessman Spyridon Contogouris also owned stakes in the company.

Baldwin later claimed that Costner and his business partner, Patrick Smith, concealed how interested BP had become in the technology. Baldwin sold his stake for $500,000, while Contogouris sold his for $1.4 million.

Soon afterward, BP made an $18 million deposit on an order reportedly worth $52 million.

Baldwin and Contogouris sued, arguing that they never would have sold their shares at those prices if they had known a major BP agreement was imminent. By the time the case went to trial, they were seeking approximately $17 million in damages.

Had Baldwin won even a portion of that amount, the money could have eliminated his mortgage debt, resolved his tax liabilities, and potentially restored his finances in one shot.

Instead, in June 2012, a federal jury sided with Costner. Baldwin received nothing. Six months later, his tax problems became a criminal matter.

The $400,000 Tax Case

In December 2012, Baldwin was arrested and charged with repeatedly failing to file New York state income tax returns.

Prosecutors said he failed to file returns for 2008, 2009, and 2010. Including interest and penalties, the total bill eventually reached approximately $400,000.

Baldwin pleaded guilty in March 2013. Under the agreement, he could avoid probation and have the charge removed from his record if he paid the full amount within the court's deadline.

He had already paid $100,000 by the time he entered his plea. Over the following year, he made additional installment payments, eventually reducing the remaining balance to $100,000.

In April 2014, Baldwin's attorney confirmed that the final $100,000 had been paid with the help of a loan from an unidentified friend.

The tax case was over. The battle for his house was not.

The Second Foreclosure Battle

Deutsche Bank filed another foreclosure lawsuit against Stephen and Kennya in 2013.

The bank claimed that the couple had stopped making their roughly $7,000 monthly mortgage payments in 2011. By 2016, years of missed payments, interest, and other expenses had reportedly increased the balance owed to approximately $1.1 million.

Baldwin fought the foreclosure. He challenged the bank's right to enforce the mortgage and argued that some payments had not been properly credited.

The court rejected those arguments.

In late 2016, a judge ordered the house sold. A public foreclosure auction was scheduled for March 2017, bringing the Baldwins' long battle to retain the property close to an end.

A foreclosure deed was recorded later that year, officially terminating Stephen and Kennya's ownership of the home they had purchased two decades earlier.

Did Stephen Baldwin Walk Away From Hollywood?

Stephen Baldwin never stopped working entirely. He continued appearing in independent movies, Christian productions, television projects, and reality shows. He also spent years developing ministries and traveling around the country with an evangelical extreme-sports program.

There is no reason to assume that his religious conversion was insincere or that his ministry work was merely an excuse for a declining career. He clearly committed significant time and energy to those efforts.

But it is also difficult to accept the idea that Baldwin simply had Tom Cruise-level opportunities sitting in front of him and nobly chose a different road.

Baldwin may be completely happy with the life he chose. Today, he is a Christian speaker and a podcaster. He has survived bankruptcy, tax charges, lawsuits, and foreclosure, and is still looking for his next opportunity. Oh, and it probably doesn't hurt that his daughter sold her makeup company for $1 billion last year…