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Author Takes Own Advice as He Rebuilds After Bankruptcy, Coronary

February 05, 1989|JAMES F. PELTZ | Times Staff Writer

WESTLAKE VILLAGE — Charles R. Whitlock is a businessman who claims to have earned millions of dollars from starting several small companies. On March 3, 1985, he suffered a heart attack at age 42 while having dinner.

Whitlock survived the attack, and while he recovered he searched for one book or magazine that had all the diet, exercise and psychological help that a heart attack victim would need to stay healthy. There was none.

So as an inveterate entrepreneur, Whitlock last year started HeartCorps magazine, "a self-help journal" for heart patients. The bimonthly publication, which premiered last summer, is getting early raves from patients, doctors and insurance companies, said Whitlock, who is the magazine's publisher. No less a personage than Dr. Michael E. DeBakey, the famous heart surgeon in Houston, has lent his name to HeartCorps' advisory board.

Things are going so well that another health-related magazine, Hippocrates, which is half-owned by Time, already has offered to buy HeartCorps for $2 million, Whitlock said.

The story of HeartCorps, in fact, would likely have made another chapter in a book Whitlock wrote 2 years ago, titled "10 Ways You Can Earn $1 Million This Year," in which he reveals his secrets of success. The book's cover shows Whitlock standing next to a limousine in front of his $1-million house.

"He has a magic touch," said William L. Bush, a former hospital manager whom Whitlock hired as HeartCorps' editor.

The Other Side

Maybe not. As Whitlock's book was coming out in 1987, he was filing for personal bankruptcy protection in federal court in Los Angeles. Meanwhile, a windmill-energy company he helped start a few years earlier also was filing for protection from creditors in bankruptcy court. And just as embarrassing, the house pictured on Whitlock's book doesn't belong to him anymore. His bankruptcy led to foreclosure on it.

It wasn't the first time Whitlock had stumbled financially. He had filed for personal bankruptcy in Green Bay, Wis., in 1969, although he neglected to mention that in his book. Whitlock said he "elected not to include it."

And, Hippocrates says it has not offered to buy HeartCorps, it has only held exploratory talks with the magazine.

Although his financial setbacks aren't in his book, Whitlock said recently that "half the battle in this life is to be able to get back up and dust yourself off." In many ways, his hopes of returning to financial health depend on the success of HeartCorps magazine.

How did Whitlock find himself in such a deep hole? His problems stemmed from Airtricity, a venture he helped start in 1982, which built and maintained powered windmills in the aftermath of the oil-shocked 1970s, when alternative energy was all the rage.

Tax Incentives

The windmills were popular with investors, largely because of tax incentives, and Whitlock said about 3,000 of his windmills are among the wind farms that populate the desert near Palm Springs. Whitlock was president and owned 39% of Airtricity.

But in 1986, the tax incentives were repealed, world oil prices collapsed from around $30 a barrel to $10, and interest in alternative energy waned. By May, 1987, Airtricity had fled to federal bankruptcy court amid a flurry of lawsuits among the company, its management, creditors and investors.

Whitlock said some Airtricity investors and creditors sought damages directly from him, and that most of his money had been invested in Airtricity, both of which led to his personal bankruptcy filing.

Whitlock claims to have made millions, but according to the filing, the millions had vanished. He listed total assets of $1.22 million, but $1.2 million of that was the market value of his 5,500-square-foot house in the exclusive North Ranch district between Westlake Village and Thousand Oaks. His debts totaled $986,946, including a $738,276 mortgage on the house, and more than $93,000 of bank and credit-card debt.

After filing for bankruptcy protection, he hoped to sell the house, pay off his mortgage and use his $460,000 of equity in the house to pay off other creditors. But he discovered that the house was built on loose, shifting land, and he could not sell the property, Whitlock said.

So Whitlock's lender, Glendale Federal Savings & Loan, foreclosed on the property last August by purchasing it for the amount left on the mortgage. Proceeds to Whitlock? Zero. And "the builder had gone bankrupt, so there was no recourse through him," Whitlock said.

Whitlock's book recounts how he started each of his businesses, along with advice and upbeat tips: "Be prepared to work hard, but be positive about your own capabilities." Chapter 2 is titled "The First Million(s)," and Whitlock lists in detail what "action steps" the reader must take to succeed.

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