Rich Dad, Poor Dad author Robert Kiyosaki has filed for bankruptcy protection for one of his businesses in the US after losing a $24 million court case.
Kiyosaki’s best-selling self-help personal finance book spawned a generation of wannabee millionaires.
Kiyosaki’s Rich Global LLC has filed for Chapter 7 bankruptcy shelter after he was ordered by a court to pay the settlement to Learning Annex and its founder/chairman, Bill Zanker.
Learning Annex helped promote Kiyosaki by arranging high-profile speaking engagements and TV appearances.
Kiyosaki and Zanker disputed how much of the profits from the gigs Learning Annex should receive, with Zanker claiming credit for the success of the Rich Dad, Poor Dad book.
Kiyosaki failed to keep promise
Zanker said: “I took Kiyosaki’s brand and made it bigger. The deal was I would get a percentage and he reneged. We had a signed letter of intent. 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.”
“This has taken years in court. I won even more money than I asked for from the jury, then he declared corporate bankruptcy. Oprah believed in him, and Will Smith believed in him, but he didn’t keep his promise to us.”
The book sold millions offering personal finance guidance, writing about the money advice he picked up from his fictitious rich and poor fathers.
Mike Sullivan, CEO of Kiyosaki’s Rich Dad Co., explained Kiyosaki declared bankruptcy because he would not put up his personal assets towards paying off the judgment, which he said was more than the value of the partnership in Chapter 11.
“The dealings we had with the Learning Annex were with a company that hasn’t been in business for a number of years,” said Sullivan.
“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.”
Kiyosaki is not personally bankrupt, but has managed his finances to trade from another firm, Rich Dad Co, rather than Rich Global and put the Rich Global partnership in to Chapter 11 to shield his personal assets.
Kiyosaki’s personal wealth is estimated at about $80 million by US magazine Forbes.
He has authored another 11 books and promotes self-help training. Sales are put at around 26 million worldwide since the book was published in 1997.