TIMES.KY

Cayman Islands, Caribbeanand International News
Saturday, May 27, 2023

Virgin Orbit's would-be white knight and a $200 million rescue that fell flat

Virgin Orbit's would-be white knight and a $200 million rescue that fell flat

As the fortunes of Richard Branson's Virgin Orbit were crashing to Earth last month, a little-known investor called Matthew Brown appeared offering a $200 million rescue.

Within two days of being contacted by Brown, Virgin Orbit Chief Executive Dan Hart had secured board backing for a preliminary agreement with the 33-year-old Texas-based investor, according to related documents and email exchanges reviewed by Reuters and three people with knowledge of the discussions.

"We have had our board meeting this morning with agreement to move forward, so I now have the buy-in I need," Hart told Brown in a March 21 email seen by Reuters.

In a separate email to staff that day, Hart offered a hopeful note for Virgin Orbit's 750 workers, most of who had been furloughed to save cash when the company halted its business earlier in March. In the email, Hart said the Long Beach, California-based company would begin an "incremental resumption" of operations.

There would be no full resumption of operations.

The potential deal with Brown unraveled in less than a week with Virgin Orbit severing contact and threatening to take legal action against him if he revealed confidential details about the potential investment, according to the cease-and-desist letter reviewed by Reuters, and the three people, who declined to be named due to the sensitivity of the matter.

The previously unreported details of a deal that was never done provide a window into Virgin Orbit's failed scramble to avoid bankruptcy. The company, which had been worth $3.8 billion in late 2022 and counted the U.S. military among its biggest clients, filed for Chapter 11 this week.

Hart, a former Boeing veteran, did not respond to a request for comment on the talks with Brown. Virgin Group, which owns 75% of Virgin Orbit, also declined to comment for this article. The group is providing financing to Virgin Orbit as the satellite launch company seeks a buyer in bankruptcy.

The legal notice was in response to an interview Brown gave on CNBC on March 23 when he said he was in "final discussions" to close a $200 million investment in Virgin Orbit within 24 hours. The letter from a lawyer for the company said Brown had overstated the nature of talks and breached a non-disclosure agreement.

Virgin Orbit's cratering stock price bounced more than 60% on the day after Brown's CNBC appearance.

The TV interview followed a report from Reuters that said Brown was nearing a deal for a proposed investment in the company, citing the term sheet signed by Hart and Brown and the planned closing date of March 24.

When the company cut contact with Brown, on March 25, it had uncovered issues with Brown's credibility, the three people said. One said executives found evidence that contradicted details Brown had provided about his background.

In interviews with Reuters over the past week, Brown dismissed accusations he had misrepresented himself. He said Virgin Orbit had not provided information he had wanted before he was comfortable transferring the $200 million into an escrow account as agreed in the term sheet. Brown did not specify the information he had sought and Reuters was unable to independently verify his assertion.

"I absolutely, 100%, had the money," Brown added.


'LAYING LOW BELOW THE RADAR'


Reuters found apparent discrepancies in several key elements of assertions made by Brown on CNBC or on LinkedIn about the companies where he says he had worked, his investments and associates.

Brown told Reuters he had no shares in Virgin Orbit and had not profited from taking his bid public and the short-lived stock price jump that followed. The company's bankruptcy filing on Tuesday showed a "Matthew Brown" as holding 238 shares at the time of the filing. Those shares were worth $48 on Thursday.

Brown said the listed investor was a different Matthew Brown.

Reuters could not find corporate registrations for two companies where Brown said on LinkedIn he had been an adviser or partner: Hong Kong-based Hogshead Spouter and Hawaii-based Kona Private Capital.

Brown told Reuters he worked through offshore entities, without providing details. He said he did not know where Kona and Hogshead were registered.

In his CNBC interview, Brown said he had worked with OpenAI. An OpenAI spokesperson said it had never worked with him.

Asked about this, Brown told Reuters he structured deals to protect investor confidentiality with a preference for "laying low below the radar."

At the time of his Virgin Orbit approach, Brown's LinkedIn page included an endorsement from Dan McDermott, identified as a former colleague at Hogshead Spouter and as a former official with the Hong Kong Monetary Authority. The central bank said it had no record of having employed McDermott.

Contacted by LinkedIn, McDermott declined to answer questions about his background.

Brown said he had worked for Woods Family Office, a Houston-based private wealth firm, from 2008 to 2021, beginning at the age of 18 in the role of CEO managing $6 billion then as a senior adviser. The family office, whose website identifies Eric Woods as the principal, did not reply to a request for comment.

When queried about his firm via LinkedIn, Eric Woods said: "I have nothing to say and my family office doesn't either." He added: "While Matt is an adviser, we're not affiliated with Matt's purchase of Virgin, which I assume this is about."

Following a Reuters inquiry to LinkedIn about whether Woods' and McDermott's accounts were genuine, both accounts were taken down. LinkedIn declined to discuss the specific cases but said its policy was to remove accounts it found to be fraudulent.

Brown said he couldn't speak for the two men or address why their LinkedIn accounts had been suspended. He added Woods was "a great man and a very successful man" and "from what I remember of Dan, incredible human being."


'LOOSE CHANGE'


Brown told Reuters he was a producer on a 2009 documentary, "Loose Change", which suggested the 9/11 attacks were a conspiracy by the U.S. government.

Korey Rowe and Dylan Avery, partners in the project, said they gave Brown a producing credit when the film was released. Brown had given Avery a camera, Avery told Reuters. Both Rowe and Avery said Brown failed to pay thousands of dollars in recording studio costs that he had verbally promised, and they cut his credit on later versions of the film.

Brown said he provided a "reasonable" amount of funding and that his split with the two "came down to a difference in personalities."

Virgin Orbit filed for bankruptcy on Tuesday. It never recovered from a failed January mission that sent a payload of satellites into the ocean.

It was a juddering comedown for a company which British billionaire Branson split off from his space tourism firm Virgin Galactic in 2017 with hopes of challenging Elon Musk's SpaceX.

Virgin Group had provided secured loans to the company but no new equity as the unit's cash dwindled.

Newsletter

Related Articles

TIMES.KY
Close
0:00
0:00
Actor Tom Hanks told Harvard University graduates to be superheroes in their defense of truth and American ideals, and to resist those who twist the truth for their own gain
The Sussexes' Royal Rebound: Could Harry and Meghan Markle Return to the UK?
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
France Arrests 10 on Suspicion of Failing to Respond in Time to Migrant Drowning
Neuralink Receives FDA Approval for First-in-Human Clinical Study
Is Saudi Arabia the holiest place in the world? Ancient Hebrew Inscriptions from "The Mount Sinai Stand" Discovered in Saudi Arabia
Ukrainian Intelligence Official Admits to Assassination Attempts on Putin
Bernard Arnault Loses $11.2 Billion in One Day as Investors Fear Slowdown in US Growth Will Reduce Demand for Luxury Products
Russian’s Wagner Group leader: “I am not a chef, I am a butcher. Russia is in danger of a revolution like in 1917.”
TikTok Sues Montana Over Law Banning the App
Ron DeSantis Jumps Into 2024 Presidential Race, Setting Up Showdown With Trump
Last Walmart in North Portland Closing Down
Florida's DeSantis seeks to disqualify judge in Disney case
Talks between US House Republicans and President Biden's Democratic administration on raising the federal government's $31.4tn debt ceiling have paused
Biden Administration Eyeing High-Profile Visits to China: The Biden Administration is heating things up by looking into setting up a series of top-level visits to Beijing by top officials in the coming months
New evidence in special counsel probe may undercut Trump’s claim documents he took were automatically declassified
A French court of appeals confirmed former President Nicolas Sarkozy's three-year jail term for corruption and influence peddling
Debt Ceiling Crises Have Unleashed Political Chaos
Weibao Wang, a former software engineer at Apple, was charged with stealing trade secrets related to autonomous systems, including self-driving cars
Mobile phone giant Vodafone to cut 11,000 jobs globally over three years as new boss says its performance not good enough
Elon Musk compares George Soros to Magneto, the supervillain from the Marvel Comics series.
Warren Buffett Sells TSMC Shares Over Concerns About Taiwan's Stability
New Study Finds That Secondary Bacterial Pneumonia Is a Major Cause of Death in COVID-19 Patients Who Require Ventilator Assistance
The Prime Minister of St. Vincent and the Grenadines calls the British monarchy "an absurdity" he wants to remove in his lifetime
King Charles III being crowned.
'Godfather Of AI' Geoffrey Hinton Quits Google To Warn Of The Tech's Dangers
A Real woman
Vermont Man Charged with Stalking After Secretly Tracking Woman with Apple AirTag
Elon Musk Statements About Tesla Autopilot Could Be 'Deepfakes,' Lawyers Claim. Judge Evette Pennypacker Does Not Understand How Far and Advanced This Technology Became
Ukraine More Prepared for Counterattack as Reinforcements Arrive
UK Prime Minister Rishi Sunak and Italian Prime Minister Giorgia Meloni Discuss Migration, Defence, and Ukraine
AT&T's Successful Test of Satellite-Based Phone Call Raises Possibility of Widespread Coverage
CNN: "Joe Biden is asking for four more years — when 74% of Americans think the country is heading the wrong way“
Turkish President Recep Tayyip Erdogan Cuts Short Live TV Interview Due to Health Issue
US Congresswoman threaten Twitter Files journalist with arrest
Pulitzer Prize-winning journalist Seymour Hersh slams New York Times' pro-government stance and treatment of sources
Enough is enough: it's time to end the war in Ukraine. While Russia may be to blame for starting it, Russia is not the one refusing to stop it
Fox News Settles their case with Dominion Voting Systems for a staggering $787.5 MILLION
AG decries scapegoating and rushed lawmaking by government
The land of the free violence
21-year-old Massachusetts Air National Guard member Jack Teixeira has been arrested for leaking classified Pentagon Documents
The Supreme Court will allow a 12-year-old transgender West Virginia girl to compete on her middle school’s girls' sports teams amid a lawsuit over a ban
Bank of America cuts short conference after outrage at Ukraine comments
Revealed: royals took more than £1bn income from controversial estates
Mitt Romney calls Trump indictment 'overreach,' says charges were 'stretched' to suit a 'political agenda'
The G-7 aims to make global crypto regulations tougher
Don’t Dismiss China’s Peacemaking Bid
China and Brazil have signed a new deal that will allow them to trade in their own currencies, bypassing the US dollar as an intermediary
Elon Musk and Others Call for Pause on A.I., Citing ‘Profound Risks to Society’
Nashville style execution
×