Tom Martino, self-declared Troubleshooter, talks about his bankruptcy, being humbled
"I had three major creditors, including Colony Financial," Martino says. "And Colony was willing to settle with me and allow me to work out management and sales of my property until everything was paid off. But the other two banks -- Colorado Capital, which was one of them that closed, and International Bank -- wouldn't settle." As such, "I filed Chapter 7 to get relief from those main three creditors. I will give up all of the properties that they financed, and they'll go back to each respective lender."
Despite the WhyIWentBroke.com website's name, "I'm not broke," he insists -- and he disputes the $78 million liabilities total (if not his assets, listed at just over $1.3 million). "I'm guessing that my portfolio went from plus-$22 million to negative-$35 million on paper. But, of course, paper is real. And now, the trustee takes a look at me, and all of my non-exempt assets go to him."
This scenario has led to plenty of reflection on his part. "If you take the last thirty years of my life, every penny that I've invested in real estate I've lost. So therefore, I've wasted thirty years, and that does change someone. You look back and say, 'What could I have done better?'"
But even though "I got my butt whupped," he says, "I don't believe in giving up -- and I don't want anyone feeling sorry for me. I made a lot of money, and unfortunately, I didn't exit when I probably should. You just keep going and hope you can maintain your property, but sometimes you can't. If everyone knew when to exit, no one would have a problem."
Martino pimping one of his many enterprises, a beverage called Efusjon.
Martino says he's been sharing this cautionary tale on his show for many months, and he thinks the experience has made him better at his job. "It adds a whole different perspective to what I do," he says. "And since I started talking about it, I've had more people sympathize and more people friendly to me. I've had people say they've gone through similar things, and a lot of e-mails from people sharing similar stories. I think it's humanized me a bit. I used to talk about my deals in a positive way, so it would be hypocritical not to talk about the problems.
"Luckily, this all happened after I had children. After I had children, I found out that there are more important things in life than money."
"The idea of bankruptcy is to get a fresh start, not to sentence people to life," he adds. Yet he believes "there needs to be a system in place where people with my level of income should be able to work out plans that are different than bankruptcy. Many creditors want all or nothing, and unfortunately, that forces you into this. And it's not something anyone wants to do."
Page down to see the aforementioned bankruptcy filing, case summary and text from WhyIWentBroke.com.
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