When you make millions giving financial advice to other people, the last thing anyone expects is for you to go bankrupt.
Robert Kiyosaki, author of the best-selling book, “Rich Dad, Poor Dad,” has filed for bankruptcy. Kiyosaki made the move after being wiped out by a $24 million dollar lawsuit that he lost to the Learning Annex.
The bankruptcy is not an indicator of Kiyosaki having poor financial health. Instead, it was a business move. Companies often file for bankruptcy when they have liabilities that exceed the market value of their assets. Kiyosaki’s company, Rich Global LLC, has filed for bankruptcy protection to shield itself from the the judgement awarded to the Learning Annex.
Kiyosaki himself is worth $80 million. Now, instead of doing business under Rich Global LLC, he now does business under Rich Dad Co, another company that he owns. Mike Sullivan, the CEO of Rich Dad, made it clear that Kiyosaki would not be putting any of his personal assets toward the judgement.
The Learning Annex arranged a large number of high-profile speaking engagements for Kiyosaki, including one at Madison Square Garden. Bill Zanker, founder and CEO of the Learning Annex, felt that Kiyosaki owed him big for what they’d done for him over the years. He also says they had a contract, with the court confirming his version of events.
“I took Kiyosaki’s brand and made it bigger. The deal was I would get a percentage and he reneged,” Zanker said.
“We had a signed letter of intent. The Learning Annex is the greatest promoter. We put his ‘Rich Dad’ brand on a stage. We truly prepared him for great fame and riches. But when it was time for him to pay up, he said no.”
Based on Zanker’s argument, we doubt that the name of the next Robert Kiyosaki book will be “Rich Dad, Honorable Dad.” It sounds like he learned a thing or two from the story-telling of Mitt Romney.
If you agree to something in writing and then choose not to pay, you might have all the riches in the world, but your soul could be bankrupt. Maybe there are things more important than money.