(The Herald Post) – As Virgin Orbit faced an imminent financial collapse last month, a mysterious investor by the name of Matthew Brown emerged, offering a $200 million lifeline to the struggling satellite launch company. However, within a week, the potential deal disintegrated, and Virgin Orbit ended up filing for Chapter 11 bankruptcy protection.
An “Incremental Resumption” of Operations
According to documents and email exchanges reviewed by Reuters and confirmed by three people familiar with the matter, Virgin Orbit CEO Dan Hart had secured board approval for a preliminary agreement with the 33-year-old Texas-based investor. In an email to staff, Hart informed Virgin Orbit’s 750 employees, most of whom had been furloughed, about an “incremental resumption” of operations at the Long Beach, California-based company. A full resumption of operations, however, would not occur.
A Deal Gone Sour
The potential deal with Brown unraveled rapidly, with Virgin Orbit severing ties and threatening legal action against him if he revealed confidential details about the potential investment. This came after Brown’s interview on CNBC, where he claimed to be in “final discussions” to close a $200 million investment in the company within 24 hours. Virgin Orbit’s stock price soared more than 60% following his appearance on the network.
Discrepancies in Brown’s Background
As the company severed ties with Brown, they uncovered issues with his credibility. Reuters found inconsistencies in several key aspects of Brown’s claims, including his work history, investments, and associates. Moreover, two companies Brown claimed to have been associated with on LinkedIn, Hogshead Spouter and Kona Private Capital, had no corporate registrations.
Brown dismissed accusations of misrepresenting himself and claimed that Virgin Orbit had not provided the information he had wanted before transferring the $200 million into an escrow account, as agreed in the term sheet. “I absolutely, 100%, had the money,” Brown stated.
An Uncertain Future for Virgin Orbit
Virgin Orbit, which had been worth $3.8 billion in late 2022 and counted the U.S. military among its biggest clients, filed for Chapter 11 bankruptcy protection this week. The company never recovered from a failed January mission that sent a payload of satellites into the ocean. The satellite launch company is now seeking a buyer as it navigates through bankruptcy, with financing provided by the Virgin Group, which owns 75% of Virgin Orbit.