Tom Martino, self-declared Troubleshooter, talks about his bankruptcy, being humbled
Tom Martino was once the embodiment of hubris -- a nationally syndicated radio host and local television personality who'd parlayed his reputation as a consumer advocate into a real-estate empire funded largely by Troubleshooter.com, which charges businesses for his recommendation. But the syndication deal went south years ago, his contract with Fox31 wasn't renewed, and his real-estate holdings have an alleged liability of $78 million, leading to a Chapter 7 bankruptcy filing. He talks about the later development in hushed tones. "It's humbling," he says.
He hasn't been keeping his financial troubles a secret. "This has been out in the open for almost a year now," he says, pointing to a website he created called WhyIWentBroke.com. It's currently inaccessible due to what Martino describes as "a worm" that infected visitors' computers when they tried to visit. However, he's provided us with the entire text of the site, on view below, in which he offers his spin on his fiscal catastrophe.
Also available for perusing is his bankruptcy filing (his home address has been redacted, at his request), as well as a case summary, dated September 2, that lists a slew of his enterprises, including Liberty-Bell Telecom, which is now majority-owned by Dish Network. But "this is not a bankruptcy of the individual entities," he says. "When you fill out the form, they want to know every name you've used for the past seven or eight years" -- the presumption being that his non-real-estate holdings can be used to offset at least a sliver of his massive debt.
Of course, the most valuable part of his remaining assets is Troubleshooter.com, and he's trying to do everything he can to protect it. "My attorney is making a motion to abandon that, because it's not involved," he says. "It has its own assets and its own liabilities, and the argument is that it has no value without me, because it's a personal-services corporation. Our position is that it's not really an asset and it would do no good for people to take. And also, it's my sole source of income" -- an interesting statement given that he continues to host a daily talk show on KHOW. Then again, the majority of the $2 million he reportedly made last year can be traced to Troubleshooter.com.
A graphic touting Martino's ReferalList.com.
The bankruptcy forms don't list his salary at KHOW or Fox31, which recently pulled the plug on Martino TV, a program that, like Troubleshooter.com, assessed businesses a fee in exchange for his stamp of approval.
Here's Martino's description of his path to bankruptcy.
"I invested heavily in real estate," he begins. "At one point, I had about $30 million in positive equity. Then, the recession came, and property values plummeted. For example, I have a property that was worth $14 million, and the next day, it was worth $6 million. Then the bank comes to you and says, 'Mr. Martino, your property is now worth half of what it had been worth. We're not going to renew this loan.'
"Then you have to find a place to get a new loan. But you're faced with a loan on a $14 million property that's only worth $6 million -- and nobody's going to give you a loan. So because of diminished property values, I couldn't refinance, and the loans were called due."
Not that he was a deadbeat. "I've never had a consumer debt in my life, and the loans weren't in default," he maintains. "I was making my payments. But I couldn't refinance -- and also, two of my portfolios were with banks that closed, which did not help. They close, and the FDIC comes in and expects you to refinance the loans, but you can't refinance something that's underwater. So you negotiate and hope you can settle."
But it wasn't to be.