Firm Unable to Find New Lease on Life : Get-Rich Company Is Officially Out of Business

Tony Hoffman, once one of television’s leading get-rich-quick real estate promoters, had a saying he repeated each night during his “Everybody’s Money Matters” investment talk show.

“In a democracy, after birth, death is inevitable,” said Hoffman, host of the nightly cable television program. “Everything else is negotiable.”

Some things, it turns out, weren’t negotiable. Such as keeping alive National Superstar, the Westlake Village company that Hoffman once headed and controlled, which promoted his cassette tapes, books and seminars that purportedly taught people how to get rich by buying real estate with no money down.

National Superstar, which Hoffman once said was the “largest and most successful real estate education company in the United States,” officially went out of business last month and is being liquidated voluntarily under Chapter 7 of the U.S. Bankruptcy Code. The liquidation comes after creditors refused an offer to take a controlling interest in the publicly held company, said Herb Wolas, the company’s bankruptcy lawyer.

“National Superstar is over, as far as I’m concerned,” Wolas said.

Last week, National Superstar’s telephone still worked even though the company had closed. An answering machine message advised callers that the company is installing a new customer computer service center. On Monday, however, there was no answer at the office number.

Hoffman would not comment on his future when reached at his Westlake Village home. He said only that “National Superstar failed because of buying and selling television time, not because the information in the tapes doesn’t work. It does work.”

National Superstar tried for more than a year to reorganize under Chapter 11 of the bankruptcy code, which protects a company from creditors while it reorganizes. National Superstar listed $5.7 million in debts and $2.4 million in assets in its Chapter 11 petition in October, 1986.

Before the Chapter 11 filing, court records show Hoffman once collected a $363,000 annual salary from National Superstar even while the company was losing money. His salary was cut to $6,000 a month, or $72,000 a year, by a bankruptcy analyst in the U.S. Trustee’s Office shortly after the company filed for Chapter 11. In January, it was cut again to $3,000 a month.

Wolas said the company’s debts now are about $3.5 million and that its assets are nominal. He said creditors probably will get nothing.

Some creditors have disputed the amounts that National Superstar says it owes them. The company’s largest creditor, Goodway Marketing, a Pennsylvania company from which National Superstar bought cable television time, said it is owed $1.2 million. National Superstar contended it owed about half that amount.

Wolas blamed the company’s liquidation on its creditors committee, calling its members unreasonable. He said National Superstar could have been reorganized into a viable company if the members had accepted an offer to convert their debt into stock.

“Instead, they elected to let the company go down the drain,” Wolas said.

But Arnold M. Quittner, an attorney representing the committee, said creditors were impatient because National Superstar was continuing to pile up more debts even in reorganization, when a company is supposed to stay current with its bills.

He added that Hoffman and another National Superstar associate, Robert Francis, were demanding a release from claims related to about $900,000 in loans they received from the company.

The loans have been the subject of a major dispute with National Superstar’s creditors since last spring, when Hoffman and Francis were unable to produce documents authorizing the loans. They then told the committee that they should not have to pay the money back because they earned that much in commissions by selling courses.

At his peak in 1986, Hoffman was one of television’s best-known get-rich-quick promoters. Often appearing on cable television late at night, Hoffman and others pitched their books and cassettes, which taught such methods as how to find people so desperate to get rid of their property that they will take an IOU as a down payment.

Besides Hoffman, other well-known get-rich gurus have had financial problems, including Ed Beckley, whose Iowa-based company filed for protection under Chapter 11 last year, and Hoffman’s former boss, Albert J. Lowry of Westlake Village, who filed to liquidate his personal assets under Chapter 7 last year.

But Hoffman was perhaps the flashiest of the group, with a cocky style and a passion for jewelry such as diamond rings shaped like dollar signs.

He was proud of his Salvador Dali paintings, and a collection of telephone-equipped automobiles such as a Mercedes-Benz sedan and a chauffeured limousine with the license plate “NGOC8R.”

Only four months before National Superstar filed for Chapter 11, television super station WTBS profiled Hoffman in a documentary on Southern Californians. In it, narrator Hal Holbrook said Hoffman “came here seeking fame and fortune and got it.”