A lot of people are commenting this issue in Facebook. Some are showing their disappointment and some are giving out negative comments. However, I find this issue interesting. I am eager to know why a well-known financial guru will make such decision. It must be something that we don’t know or cannot foresee.
People often say “Never judge a book by its cover”. Hence, instead of commenting anything with just the article titles, I am trying to search and ask for more information.
The word “bankrupt” or “bankruptcy” have been stereotyped negatively. The moment these words go into out mind, most of us will relate to a bad news. However, in corporate world, it can be one of the smartest move.
What’s really happening
As an entrepreneur, Robert Kiyosaki owns several businesses. One of them is Rich Global LLC, which has been filed for corporate bankruptcy. This company is ordered to pay nearly US$24 million to the Learning Annex and its founder and chairman, Bill Zanker.
For the past few years, Kiyosaki was utilizing the Learning Annex platform for several high profile speaking engagements. The U.S. District Court jury ruled Zanker and the Learning Annex were entitled to a certain percentage of the profits from those engagements. “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.”
Mike Sullivan, CEO of Kiyosaki’s Rich Dad Co., reported that “Robert and Kim are not paying out of personal assets. We have a few million dollars in this 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.”
According to him, Robert would not losing any personal assets and he claimed that the judgement is far more than Rich Global LLC’s value. In fact, this bankruptcy is not affecting Robert Kiyosaki’s wealth. Neither his wife, Kim.
The Beauty of LLC (Limited Liability Company)
In Malaysia, Limited Liability Company is known as Sendirian Berhad (Sdn. Bhd.). The beauty of this is that the company and owners (known as shareholders) are having separate entity, unlike Sole Proprietor or Partnership. When a limited liability company goes bankrupt, the assets of the shareholders are not affected.
I personally think that Robert Kiyosaki is taking the most strategic move. Rich Global LLC has been filed bankruptcy. However, Rich Dad Co. is still generating millions. His investment in gold, silver and oil will not be affected too.
Is Robert Kiyosaki a Bankrupt Dad?
Articles are using the term “Bankrupt Dad” to describe Robert Kiyosaki right now. However, I disagree with it.
If today I own a sole proprietor pr partnership business, I am bankrupt if my business goes bankrupt. However, if I own a Limited Liability Company or “Sdn. Bhd.” company and the company is filed for bankruptcy, I am not bankrupt.
So is Robert Kiyosaki bankrupt? The answer is a big NO! So how can he be titled as “Bankrupt Dad”?
The only problem…
In the entrepreneurial world, Kiyosaki’s move makes a lot of sense. However, Learning Annex has been giving him many platforms to brand “Rich Dad”. I am not sure whether US$24 million is a fair value or not, but I personally feel that Learning Annex deserves some monetary returns. Filing bankruptcy is the best move to prevent losing of assets, but it’s somehow way too cruel for the opposing party. It’s all about the matter of integrity.