Ian Somerhalder lost everything to 8-figure debt. Here’s what Canadians can learn about recovering from a financial nightmare

Fraud involving an unnamed clean energy company left him and his wife, actress Nikki Reed, in what he describes as "an eight-figure hole." The exact figure was never disclosed, but the couple was at least US$10 million (C$13.8 million) in debt — a situation Somerhalder called "a true nightmare."

Instead of living off residuals from some of TV's biggest global hits, Somerhalder and Reed found themselves scrambling to scrape up every dollar they had to pay off the debt. Here’s how they did it, and what Canadians struggling with their finances can learn from their situation.

What they did to survive

According to Somerhalder, Reed was the one who ultimately led the way out. He said his wife "really negotiated [them] out of this deal, but [they still] sold houses, paintings, cars, watches, everything."

"This woman here decided that she didn't want to see her husband ruin his body/mind/spirit and pulled up her bootstraps and got down in the trenches assembling a team to get to the negotiating table to find a way out," Somerhalder wrote on Instagram in 2021. "She devoted her life to getting me out of that mess, and it almost killed her along the way (2)."

Today, Somerhalder is a co-founder of multiple businesses, including Brother's Bond Bourbon, a venture with his The Vampire Diaries co-star Paul Wesley (3) and the Absorption Company, a brand of high-absorption powdered supplements he co-founded with Reed (4).

Still, he says in hindsight he "should have been retiring off of one of the biggest TV shows in the world" instead of "starting companies that were not gonna pay [him] possibly ever."

Smart takeaways from Somerhalder's money setbacks

Somerhalder's story might sound extreme, but the lessons learned hit close to home for anyone who has ever poured money — or trust — into a promising venture that unravelled. In a time when side hustles and entrepreneurship are widely encouraged, here are some key takeaways to consider before you commit your hard-earned money.

High income doesn't equal financial security

Even with a steady, enormous paycheque from a hit series, Somerhalder's financial stability came apart quickly. Income can easily disappear — but debt hangs on, especially from failed business ventures.

The Canadian Securities Administrators (CSA) stresses the importance of diversifying your investments and building a plan that accounts for risk before committing capital to any venture (5).

Don't invest blindly

Starting a business can be rewarding, but it demands due diligence, clear structure and oversight. Somerhalder openly admits he didn't build his company properly — a costly mistake when large sums of money and your personal reputation are on the line.

The risk of fraud is real

Many entrepreneurs focus on growth while underestimating how easily fraud can derail a venture. According to the Canadian Anti-Fraud Centre (CAFC), a federal government agency that tracks fraud and cybercrime, Canadians lost over $704 million to fraud in 2025 — and investment fraud was the single most costly category, accounting for roughly $351 million of those losses (6).

Verify that any investment or business partner is legitimate, avoid phishing scams and stay informed about emerging threats. The CSA offers a free national registration search tool that allows investors across Canada to verify whether a financial adviser or investment firm is registered in their province or territory (7).

Liquid savings can protect you when things go sideways

Selling assets like homes and collectibles helped Somerhalder regain his footing, but doing so under pressure often means getting shortchanged. Keeping a portion of your wealth easily accessible to prevent fire-sale scenarios is crucial.

Build your emergency fund faster. Open a high-interest savings account with EQ Bank — earn more while keeping your money accessible.

A strong support system is key

Who you surround yourself with matters. Reed's role in navigating the negotiations was, by Somerhalder's own account, what got them through. Whether it's a partner, a licensed financial adviser or a mentor — having someone you trust, and who is capable in a crisis, can make a critical difference.

Recovering from a failed business

Even if you take every precaution, the unexpected can still hit hard. A failed business — whether due to fraud or other circumstances — is tough to navigate both financially and emotionally.

But experts say there's a path forward, and it starts with acceptance.

Mogul and bestselling author Neil Patel, writing in Entrepreneur magazine, says that by accepting it's over, "failing fast" can help you break out of denial and start rebuilding (8). Otherwise, you risk pouring more money into a venture that's already finished.

Once you've accepted the loss, Patel says, it's important to grieve — but not get stuck there.

"Give yourself the time you need to be upset, sad or angry," Patel writes. "That could take three months. It could take 30 minutes … You should avoid staying at this emotional nadir, however. There is benefit in negative emotion. The benefit is to give yourself the inspiration to pick up, move on and build again."

Research led by Bayes Business School on entrepreneurial failure found that taking time to accept the loss, grieve and then look forward can help people move onwards — and upwards.

"Entrepreneurs who take stock, grieve and acknowledge how they feel about their business failure might develop and engage in building networks, coaching and raising money," the researchers found (9). "A positive, resilient attitude to failure is associated with bouncing back, while prolonged grief jeopardizes chances of this."

Patel also recommends taking full responsibility for what went wrong — not searching for outside factors or other parties to blame. He argues that owning the experience allows you to learn from it: "To staunchly deny your culpability is to refuse to learn from the experience."