Personal finance author files for Chapter 7 bankruptcy
The author of personal finance books “Rich Dad, Poor Dad” and nearly a dozen other financial guides has filed for Chapter 7 bankruptcy for one of his companies. The bankruptcy filing was reportedly motivated by a nearly $24 million legal judgment that was won against the company earlier this year.
Author Robert Kiyosaki rose to fame after the publication of “Rich Dad, Poor Dad” in 1994. In the book, he details good financial advice he purportedly received from a fictitious “rich father” and compares it to the bad advice given to him from a fake “poor father.” According to the lawsuit, Kiyosaki and his book gained exposure through the actions and assistance of Learning Annex, which helped the author get high profile speaking engagements.
As such, the lawsuit claimed, Learning Annex was entitled to a portion of Kiyosaki’s profits from the book. “We had a signed letter of intent,” said Bill Zanker, the founder and chairman of Learning Annex. “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.”
The court agreed, ordering Kiyosaki’s company Rich Global LLC to pay nearly $24 million to Learning Annex. With just $1.8 million in assets, according to court documents, the judgment forced the company to file for Chapter 7 bankruptcy.
Kiyosaki, who has an estimated $80 million in personal wealth, did not file for personal bankruptcy. The author is reportedly emerging from the judgment unscathed, and is simply doing business under the name of another company that he owns.
Source: Digital Journal, “Robert Kiyosaki, author of Rich Dad Poor Dad files for bankruptcy,” JohnThomas Didymus, Oct. 13, 2012