Against All Odds: My Story (14 page)

A few minutes after I heard the laughter subside, I left the dressing room. Steve was sitting on the floor of the studio, talking to the women. I casually walked over and sat down next to him. I was right. The only one who even looked at me was Steve. But if looks could kill, I'd have been dead!

The class was fun for me because I was already limber, but Steve complained about his stiffness for days and, of course, my tricking him. During the time Steve was taking lessons from me, we got to be pretty good friends. Often we'd sit around after class, just talking candidly. One evening after a workout Steve surprised me by asking, “Chuck, how do you know if someone likes you because you're who you are or because you're a star?”

“I'm not a star like you,” I said, “but if I enjoy being with that person, I don't worry about their ulterior motives. If you worry about it, the only person getting depressed is you.”

Steve McQueen was probably more open with me than with most people, but the emotional wall that he built to protect himself precluded much personal vulnerability in our relationship. Although we were good friends, we rarely allowed our conversations to go beyond racing, motorcycles, cars, and the martial arts.

We both loved doing special things with our boys, though, and when my sons, Mike and Eric, were only eleven and eight years of age respectively, Steve and I took them to Indian Dunes outside Los Angeles and taught them how to ride motorcycles competitively, with the stipulation that they ride them only on dirt and never on the street. The boys agreed … reluctantly. Eric, especially, took to racing motorcycles. As he grew older, his passion for racing took different forms, including offroad motorcycle races, racing cars, trucks, and even racing on the NASCAR western circuit, winning that division in 2002.

I enjoyed my role as a martial arts teacher and assumed that the financial matters were being well cared for by our new owners. Unfortunately, I was wrong; my business affairs were in shambles. While they had expanded the number of schools, the company that bought my schools had no notion of how to operate a personal service business in which decisions have to be made immediately. My partner, Bob Wall, and I tried to tell them what they were doing wrong, but they refused to listen to us. Bob finally got fed up, sold his interest in the schools, and went into the real estate business.

By 1973, the owners of our schools were in deep financial trouble and had lost more than a million dollars. They sold the schools to another group, which, in turn, sold them to an individual who was more interested in siphoning off the assets than increasing the income. He told me that the schools would be bankrupt within a few months.

Although I had no fiduciary responsibility at that point, I didn't want the schools that carried my name to be associated with a bankruptcy, so I asked the new owner how much was owed. He admitted that he was $140,000 in debt, a staggering sum in 1973. “You take over the debts and you can have the remaining seven schools,” he told me.

I made the deal with him, but because of my lack of business acumen, I neglected to include a clause in the contract saying that I would be responsible only for those debts listed in the bill of sale. That was a major mistake.

I sat down with a notepad and tried to devise a plan of action. I figured that if I sold five of the schools for $25,000 each, that would bring in $125,000. I had a little money saved that would make up the difference, so I could still keep two schools and keep the Chuck Norris Karate Schools solvent.

I contacted my black belts, who were running the five schools I hoped to sell, and asked each one whether he wanted to buy the school he was managing. All five jumped at the chance to own a karate school. Each one of the new owners agreed to put down $5,000 and pay me the balance at $500 a month.

I called the creditors and explained the situation. I told them I didn't want to go into Chapter 11 bankruptcy and promised personally to pay them a hundred cents on the dollar if they would give me some time. Most of them were amazed at this offer and were willing to accept the deal. They realized that if the schools declared Chapter 11, I'd be required to pay only ten cents on every dollar owed. I reiterated to the creditors that I didn't want to file bankruptcy, and thankfully, they were willing to work with me. They agreed to let me pay them off by dividing the $2,500 I received each month from my black belts between my creditors.

The black belts made regular payments. Everything went smoothly until I was suddenly hit with an additional $120,000 in bills, including unpaid payroll, state, and federal taxes the previous owner had neglected to tell me about. The IRS said that if I didn't pay a minimum of $12,000 that I owed them, they would close all the schools immediately.

I couldn't afford an attorney, so I went to a business friend of mine, showed him the books, and asked for his advice. “Go into bankruptcy,” he said. “You don't have a chance to bail out of this.”

I was completely broke, but bankruptcy was not an acceptable option to me. I sold my last two schools and raised $10,000. George, my stepfather, was able to lend me $1,000 which gave me $11,000. But I still needed another $1,000 to make the minimum IRS payment.

When I told Bob Wall about my problem, he said he didn't have any cash, but he did have a $1,000 line of credit on a credit card. He borrowed the money from it and gave it to me. I had no idea how I could repay George and Bob, but I was determined to find a way to pay back every penny.

Meanwhile I had to move out of my office. My friend, Larry Morales, came by to help. He brought a pickup truck and a couple of employees. I mentioned to Larry that I had four desks that I wanted to sell for a hundred dollars each. Larry said he knew someone who might be interested and took the desks away with him. Two hours later he returned with $400.

“Wow! That's great, Larry. Who bought the desks?”

“Oh, just some guy who really needed them,” he replied nonchalantly.

A couple of months later, I visited Larry at his machine shop. As I walked around, I looked up at his loft and saw my four desks stored there. I realized that he had bought them himself to help me out, even though he was struggling in his new business and was hard-pressed just to make ends meet.

True friendships are based on gestures such as Bob's and Larry's. They came through when I needed them, and I have never forgotten it. It gives me tremendous pleasure to know that today both of my friends are successful businessmen.

I sold my last two schools, as well as my beautiful new Cadillac, and used the money to pay my creditors. I told the creditors about the unexpected tax problem and asked them for more time. I told them that although it would take a little longer to pay them off, I'd make sure that every cent was paid. They were fine with that.

To meet my personal overhead, I gave seminars and taught private lessons. Although I didn't regard it that way at the time, losing the schools and beginning to teach privately was a pivotal point in my career. I probably would never have done a movie had I not made that shift in direction. But that didn't mean it was easy. Far from it!

I was still broke. I was determined to hold on to our house for as long as possible, but I wasn't making enough money to cover even our basic household expenses. I didn't know how much longer I could last.

Dianne had been incredibly supportive throughout the entire ordeal. Ironically, we depended on each other and worked better as a team more through the tough times than we had during the glory days following the sale of our schools. The problems may have cemented us together in a way prosperity never could have. Indeed, we spent four years fighting to save our karate schools, and they may have been the best years of Dianne's and my marriage.

One night I asked Dianne, “What's the worst thing that can happen? We'd just have to start over again. Is that really so bad? When you look around and see the problems other people face, ours seem minuscule.”

Dianne agreed.

Then an amazing thing happened. The producers of
The Tonight Show
called. They wanted some information about one of my private students, Phil Paley, the youngest black belt in America. Phil was a handsome, tow-headed, nine-year-old who was small for his age but exceptionally good at karate. We were invited onto
The Tonight Show
, where we did a demonstration, and after the demonstration Johnny interviewed Phil and me. I've done many talk shows over the years, but Johnny Carson's was the best. He was extremely funny, but he was also knowledgeable about the subject of karate. He asked all the right questions— ones to which I knew the answers—allowing me to come off as the premier karate expert in the country.

Bill Marr, a prominent businessman in Norfolk, Virginia, who owned the Yellow Cab Company there, as well as several other businesses, saw the Carson show. He telephoned me the next day to say that his young son was taking karate from a Korean instructor and that he was coming to California and would like to meet with me. “I may be interested in purchasing a karate school franchise,” Mr. Marr told me. I didn't know what that entailed, and since he was just coming out to inquire, I didn't consider it a big deal. But I told him that I'd be glad to meet with him and answer any questions that I could.

When Bill and I met in my office, he asked me why I thought people wanted to study karate. I explained my belief that when a person says he wants to learn karate, he is really saying, “Make me a more secure person.” I told Bill, “The positive concepts the student develops make him feel better about himself. I motivate students to work hard physically and mentally. At the same time I try to instill in them a philosophical approach to life that will be of great personal benefit.”

Bill was interested in my concepts, but he wanted to check out other schools around the country. He promised to call if he wanted to make a deal. Two months later he called back and said that he preferred my system to the others he had investigated. He wanted to buy a franchise, incorporating my teachers and teaching methods.

After we struck a deal, my brother Aaron and Rick Prieto, both black belts, went to Virginia Beach to open two new Chuck Norris Karate schools. They continued running them for five years, inspiring and motivating their students so well that the schools flourished. Bill Marr's schools became some of the most successful karate schools in the world at that time.

The money I received from Bill helped Dianne and me get out of debt and back on our feet. Although I had lost my schools, in time I was able to pay back the creditors every cent I owed them. It was a long, difficult process, but one that was well worth it, financially, emotionally, and ethically. One day I ran into the businessman who had advised me to go bankrupt. When I told him what I had done, he shook his head and said, “I would have bet a thousand dollars to a doughnut that you could not have done it.”

But I had, and now I felt as though a million pounds had been lifted from my shoulders. I was ready for some new challenges.

CHAPTER 13

HOLLYWOOD STARS AND OTHER HIGH-PROFILE STUDENTS