Chapter 7 Bankruptcy for “Rich Dad, Poor Dad”

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Author of “Rich Dad, Poor Dad” and financial guru, Robert Kiyosaki, filed for Chapter 7 bankruptcy after a court judgment earlier this year. Rich Global LLC filed corporate bankruptcy after losing almost $24 million to The Learning Annex.

The first of 12 books, and a New York Times best seller, “Rich Dad, Poor Dad” gave financial guidance to millions of people, telling stories of advice received from both (fictitious) rich and poor fathers.

The Learning Annex was one of Kiyosaki’s first backers and helped promote the book by getting him out in front of the public, including on PBS, at the Madison Square Garden and the “Oprah” show.

The New York Post reported that Kiyosaki never paid The Learning Annex their share for putting him on the path that led to his success.

The judge agreed by awarding The Learning Annex $23,687,957.21, which led to the Chapter 7 bankruptcy protection filing for Rich Global LLC. ABC News had Rich Global LLC’s assets valued at $1.8 million.

By filing corporate bankruptcy for one of his companies, Kiyosaki is able to avoid having to file a personal bankruptcy and protect himself, as well as his other businesses that are not tied to Rich Global LLC.

Because Kiyosaki operates other companies, he should be able to stay in business, although not everyone agreed with the advice doled out in his books.

Last week in Forbes, Helaine Olen commented on the tips given out the book,

“tips ran the gamut from ridiculous to illegal and downright hurtful and included advocating for insider trading, arguing for the purchase of multiple real estate properties with little or no money down and telling followers they could purchase stocks on margin via unfunded brokerage accounts."

Regardless of people’s opinions on Kiyosaki’s “Rich Dad, Poor Dad”, this is a business matter and does not come as a surprise to everyone.

Mike Sullivan, who is CEO of another of Kiyosaki’s businesses, Rich Dad Co. told the Daily Mail,

"The dealings we had with the Learning Annex were with a company that hasn't been in business for a number of years. I am not surprised Learning Annex is upset and angry, the money doesn't exist in that company, and we can't bring money out of the group. We got hit for what we think is a completely outlandish figure."

The Chapter 7 bankruptcy filing for Rich Global LLC will not affect the personal assets of the man known as a personal finance guru to many people.

The personal wealth of Robert Kiyosaki is estimated at about $80 million, according to Forbes.

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This entry was posted on Tuesday, October 16th, 2012 at 10:38 am and is filed under Bankruptcy News and Events. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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