Sarah Ferguson, Duchess of Debt?

Oct. 5, 2009 — -- Sarah Ferguson's U.S. business dealings are turning out to be a good news-bad news situation. On the one hand, the Duchess of York has reportedly just signed a contract with a U.S. film company to make a series of movies from her popular series of children's books.

"A major U.S. film company has bought up rights to my series of children's books…I cannot tell you how exciting that is for me…" Ferguson told the U.K's Daily Mail newspaper.

But at the same time, Ferguson's lifestyle company, Hartmoor LLC, which was set up to handle some of her U.S. business interests, is in the process of being dissolved. And the New York Post is reporting that the Duchess has some unhappy creditors who are owed more than $1 million and may be looking at a payout of just 50 to 75 cents on the dollar.

A spokesman for the Duchess characterized the situation with Hartmoor this way: "She has faced some challenging and difficult times with one side of her business, Hartmoor, but she is very resilient, will work through the situation and bounce back from this."

In addition, Ferguson's eponymous foundation may be on firmer financial footing than previously thought. Tax records show that the Sarah Ferguson Foundation paid out just $22,600 in 2007 despite having raised more than $508,000. But additional records provided to ABC News.com indicate that the Foundation paid out $315,130 in 2008 from the funds raised in 2007. Recipients of the money include the Orphans Relief Fund for Wenchuan ($50,000), the Myanmar Relief Fund ($50,000) and the African Caribbean Leukemia Trust ($16,657) among others.

Reports that the Duchess of York's finances might be in disarray have received a lot of attention, in part, because Ferguson has had a history of financial trouble.

In 1996, as she was divorcing Prince Andrew, British tabloids were abuzz with the news that she owed more than $4 million to British bankers Coutts and Co. and that the royal family, specifically Queen Elizabeth II, was fed up with Ferguson's free-spending ways and refused to pay her bills.

After the divorce, Ferguson moved to New York and is said to have slowly regained her financial footing. She wrote a successful series of children's books and signed a lucrative and high-profile deal to be the spokesperson for Weight Watchers International.

In addition to the Sarah Ferguson Foundation, Ferguson also started the charity Children in Crisis. In an interview on "Larry King Live" in 2001, the duchess admitted that there had been a time when was financially "out of control" and that it took years to earn the money to pay off her debt.

Now come news reports that the Duchess was recently sued in England by an accountant, an attorney, and a photography studio for unpaid bills ranging from $2,500 to about $25,000.

A spokeswoman for the Duchess denied that Ferguson is in financial trouble and said she "has a number of exciting projects" in the works.

"The Duchess is in a very good place in terms of business and her philanthropy and good works," the spokesowman told ABCNews.com.

While the Post reported that Hartmoor is behind on its taxes, the spokeswoman said Hartmoor's closure is due to a "parting of the ways with investors."

The Sarah Ferguson Foundation, she said, "is absolutely still running."

Celebrity Financial Troubles: Ferguson, Leibovitz and Jackson

Ferguson isn't the only well-known celebrity with a healthy income who's had trouble paying the bills. Celebrity photographer Annie Leibovitz took out a $24 million loan to cover some outstanding debts using her house and the copyrights of her work as collateral. When the loan came due and she was unable to pay, Leibovitz came close to losing her home and her life's work. Leibovitz's annual salary is estimated to be in the millions.

And then there's Michael Jackson who, despite being one of the most successful pop musicians of all-time, died deeply in debt.

"A lot of time they have no idea what things cost relative to what they have or what they make," said Barbara Culver, a financial and legacy planner based in Cincinnati, Ohio.

Culver explained that wealthy clients often don't pay close attention to money matters because they've never really had to. "As long as the money is available to them, and they can withdraw what they need, they don't have to think much beyond that," she said.

And yet, a prominent figure like Ferguson is a little like a CEO. She has a number of people -- agents, publicists etc. -- on the payroll and is marketing a product -- herself.

Just like a corporation, celebrities like Ferguson have monthly obligations to meet but may not have the training or skills needed to keep the business thriving, financial advisors say.

"Celebrities have many talents but running a business is likely not one of them. You have to know how to hire people, how to monitor their performance how to set benchmarks," said Douglas Freeman, the managing director of strategic planning for California-based First Foundation Advisors.

And then there's the business of keeping up appearances. The cost of flying first-class, paying for multiple homes and swanky vacations adds up quickly. And just like the rest of us, when the market goes sour or we lose a source of income, it can be hard to cut back.

"When you have a high income, many people think it will never end … they almost think the law of gravity was repealed and they don't do any planning," Freeman said. "That's when they get into trouble."

With reports from ABC News' Alexa Lightner.