April 8 (Portal) – When the fate of Richard Branson’s Virgin Orbit crashed to Earth last month, a little-known investor named Matthew Brown appeared and offered a $200 million bailout.
Within two days of Brown being contacted, Virgin Orbit chief executive Dan Hart had secured board support for a tentative agreement with the 33-year-old Texas-based investor, according to related documents and email exchanges , which were examined by Portal and three experts of the discussions.
“We had our board meeting this morning with an agreement to move on, so now I have the buy-in I need,” Hart Brown said in a March 21 email seen by Portal.
In a separate email to employees that day, Hart offered a hopeful note for Virgin Orbit’s 750 employees, most of whom were furloughed to save money when the company ceased operations in early March. In the email, Hart said the Long Beach, Calif.-based company will begin a “gradual resumption” of operations.
There would be no complete resumption of operations.
The potential deal with Brown was uncovered in less than a week, with Virgin Orbit cutting off contact and threatening legal action against him if he revealed confidential details about the potential investment, according to the cease and desist letter seen by Portal and the three audited People who wished not to be named due to the sensitivity of the matter.
The previously unreported details of a deal that never went through offer a glimpse into Virgin Orbit’s failed attempt to avoid bankruptcy. The company, which was valued at $3.8 billion at the end of 2022 and counted the US military among its largest customers, filed for Chapter 11 this week.
Hart, a former Boeing veteran, did not respond to a request for comment about the talks with Brown. The Virgin Group, which owns 75% of Virgin Orbit, also declined to comment on the article. The group is providing financing to Virgin Orbit as the satellite launch company seeks a bankrupt buyer.
The legal notice was in response to an interview Brown gave on CNBC on March 23, when he said he was in “final talks” to complete a $200 million investment in Virgin Orbit within 24 hours . A letter from a company lawyer said Brown overstated the nature of the talks and violated a non-disclosure agreement.
Virgin Orbit’s stock price rallied more than 60% the day after Brown’s CNBC appearance.
The television interview followed a report by Portal that said Brown was close to a deal for a proposed investment in the company, citing the term sheet signed by Hart and Brown and the proposed closing date of March 24.
When the company cut ties with Brown on March 25, problems with Brown’s credibility were revealed, the three people said. One said executives found evidence contradicting the details Brown had made about his background.
In interviews with Portal last week, Brown denied allegations that he misrepresented himself. He said Virgin Orbit failed to provide any information he wanted before he could transfer the $200 million into escrow as agreed in the term sheet. Brown did not specify the information he was seeking and Portal was unable to independently verify his claim.
“I absolutely, 100 percent had the money,” Brown added.
“LEAVE DEEP BELOW THE RADAR”
Portal found apparent discrepancies in several key elements of claims Brown made on CNBC or LinkedIn about the companies he worked for, his investments and his employees.
Brown told Portal he has no stake in Virgin Orbit and has not benefited from the public offering of his bid and the short-lived share price jump that followed. The company’s bankruptcy filing on Tuesday showed that “Matthew Brown” held 238 shares at the time of filing. Those shares were worth $48 on Thursday.
Brown said the publicly traded investor is a different Matthew Brown.
Portal could not find company registrations for two companies where Brown said on LinkedIn he was an advisor or partner: Hong Kong-based Hogshead Spouter and Hawaii-based Kona Private Capital.
Brown told Portal he worked through offshore companies, without giving details. He said he didn’t know where Kona and Hogshead were registered.
In his CNBC interview, Brown said he worked with OpenAI. An OpenAI spokesman said it has never worked with him.
When asked about this, Brown told Portal he has structured deals to protect investor confidentiality, preferring to “stay under the radar”.
At the time of his approach to Virgin Orbit, Brown’s LinkedIn page featured a recommendation from Dan McDermott, who has been identified as a former colleague at Hogshead Spouter and a former Hong Kong Monetary Authority official. The Fed said it had no record of employing McDermott.
Contacted by LinkedIn, McDermott declined to answer questions about his background.
Brown said he worked for Woods Family Office, a Houston-based private wealth firm, from 2008 to 2021, beginning at age 18 in the role of CEO managing $6 billion, then as a senior advisor. The family office, whose website credits Eric Woods as the principal, did not respond to a request for comment.
When asked about his company via LinkedIn, Eric Woods said, “I have no say and neither does my family office.” assume that’s what this is about.”
After a Portal query to LinkedIn as to whether Woods and McDermott’s accounts were genuine, both accounts were shut down. LinkedIn declined to discuss the specific cases, but said its policy is to remove accounts found to be fraudulent.
Brown said he could not speak for the two men or address why their LinkedIn accounts had been suspended. He added that Woods was “a great man and a very successful man” and “from what I can remember about Dan, an incredible human being.”
‘SMALL CHANGE’
Brown told Portal he was the producer of the 2009 documentary “Loose Change,” which suggested the 9/11 attacks were a US government conspiracy.
Korey Rowe and Dylan Avery, partners on the project, said they credited Brown as producers upon the film’s release. Brown gave Avery a camera, Avery told Portal. Both Rowe and Avery said Brown failed to pay thousands of dollars in recording studio fees he verbally promised, and they cut his credit on later versions of the film.
Brown said he provided a “reasonable” amount of funding and his split from the two was “due to a difference in personalities.”
Virgin Orbit filed for bankruptcy on Tuesday. It never recovered from a failed January mission that sent a satellite payload into the ocean.
It’s been a harrowing descent for a company that British billionaire Branson spun off from his space tourism firm Virgin Galactic in 2017 in hopes of challenging Elon Musk’s SpaceX.
The Virgin Group had provided the company with secured loans but no new equity as the unit’s cash position dwindled.
Reporting by Joey Roulette in Washington and Kevin Krolicki in Singapore; Additional reporting by Ben Klayman in Detroit; Editing by Pravin Char
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