Despite Bankruptcy Case, “Rich Dad, Poor Dad” Author Remains a RICH Dad

Popular author Robert Kiyosaki of “Rich Dad Poor Dad” fame seems under assault from mainstream media. While it has been true that Mr.Kiyosaki has indeed filed for bankruptcy, the guy has been insinuated as personally ‘bankrupt’.

[disclosure: I am no fan of Robert Kiyosaki. Mr. Kiyosaki was wrong about the real estate bubble in 2005. But has been right about the currency bubble and being bullish in precious metals. Nevertheless,  this terse commentary has been meant to put Mr. Kiyosaki’s case in perspective]

From ABS-CBN,

In an ironic twist, the author of the bestselling financial help book “Rich Dad Poor Dad,” Robert Kiyosaki, has filed for bankruptcy.

This after one of his companies lost a $24-million court judgment, according to a report from the New York Post.

“Kiyosaki’s Rich Global LLC filed for bankruptcy after being ordered to pay nearly $24 million to the Learning Annex and its founder and chairman, Bill Zanker,” the report said.

“US district judge Shira A. Scheindlin in April ordered Rich Global to pay up $23,687,957.21 after a jury ruled Kiyosaki must give the Learning Annex a percentage of his profits after using their platform for speaking engagements, including a 2002 gig at Madison Square Garden,” it added.

In reality, the reason behind Kiyosaki’s Rich Global LLC filing for bankruptcy has been about legal maneuvering

The same article quotes Mike Sullivan, chief executive officer of Kiyosaki’s Rich Dad Co as saying:

“Robert and [wife] Kim are not paying out of personal assets. We have a few million dollars in his company, but not 16 or 20. I can’t do anything about a $20-million judgment… We got hit for what we think is a completely outlandish figure.”

Mainstream media never explains this or at least gives an effort to make news objective or balanced.

Fundamentally, the case stems from charges of breach of contract by an aggrieved party whom was awarded in the court case.

From Business Insider,

But apparently the fame went to his head because according to court papers obtained by the Post, Kiyosaki, who published his first "Rich Dad" book in 1994, never paid the Annex its rightful share. Said founder and chairman Bill Zanker: "Oprah believed in him, and Will Smith believed in him, but he didn't keep his promise to us."

Yet Mr. Kiyosaki remains solvent in spite of the bankruptcy filing. Again from Business Insider:

Despite the blow to the personal finance guru's reputation, Kiyosaki probably won't feel the pinch in his wallet. Forbes pegs his net worth around a cool $80 million, and Kiyosaki, who's written 11 books, operates as many as ten other companies. Rich Global was said to be worth a few million when it went under.

Again, legal maneuvering from a bankruptcy procedure has been about the potential to discharge debts through the bankruptcy court.

According to bankrate.com, debts that are usually discharged from bankruptcy covers the following:

I think Mr. Kiyosaki’s decision to file for bankruptcy means that his case will fall under

Lawsuits and judgments: These result from creditors or collection agencies suing you for failing to pay. With few exceptions, you may eliminate the lawsuit even after it has begun or the judgment that results from the lawsuit.

So despite the bankruptcy proceedings and the implied media slur, Mr. Kiyosaki remains a RICH Dad!!! This serves as one neat example of why you shouldn't trust the mainstream media.