Just a few days ago it was reported that Robert Kiyosaki of “Rich Dad, Poor Dad” fame filed for corporate bankruptcy through Rich Global LLC – one of his many companies. Rich Global LLC filed for Chapter 7 bankruptcy protection on Aug. 20 in a Wyoming bankruptcy court. The New York Post reported the following:
After a long, lucrative career writing financial self-help books and giving seminars, “Rich Dad Poor Dad” author Robert Kiyosaki has filed for bankruptcy for one of his companies after losing a $24 million court judgment.
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.
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.
The challenge here, at least for me, is not the bankruptcy filing – rather it’s the ethical implication related to the filing. The short version is that there was an agreement with the Learning Annex to promote Kiyosaki and his brand for a percentage. By all accounts they did their part. The challenge is they claim that Kiyosaki didn’t do his. In other words he didn’t pay up. Again the New York Post states:
Zanker told us, “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. 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.’ ” 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.”
Mike Sullivan, CEO of Kiyosaki’s Rich Dad Co., told us that Kiyosaki, said to be worth $80 million, was still doing very well thanks to investments in other companies: “The dealings we had with 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.
The core question – If a jury in a court of law says that you failed to honor your contract with a service provider and they establish an award as punishment, compensation, or justice for the failure that they found existed, is it ethical to use the legal system to avoid the consequence?
“Robert and [wife] 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.”
Reportedly work some $80 million, it would seem that Kiyosaki’s ethical limit is defined by money. But is that right? Certainly many would argue that the legal system is designed to protect one from unfair or unjust circumstances much like what I suspect Kiyosaki feels he received. Yet, others would argue that justice was served at the hand of the jury and that Kiyosaki has an ethical moral obligation to honor the award and pay up.
But what if we take this to a higher plain. Is it possible that short of paying up based on the idea that it is moral, ethical and founded in integrity, that failure to do so will create the desired outcome anyway? Is it possible that when one violates, what to some is simple ethics, that reality is karma takes over and delivers the outcome or consequence anyway?
It is not up to me to judge – rather I am interested in the ethical questions and what you think. YOUR COMMENTS ARE WELCOME!