Matthew Brown, a little-known businessman, offered $200 million to save Virgin Orbit last month.
According to papers and email exchanges examined by Reuters and three individuals with knowledge of the proceedings, Virgin Orbit CEO Dan Hart he won board approval for a preliminary deal with the 33-year-old Texas-based investor two days after Brown approached him.
“We held our board meeting this morning with consent to move forward, so I now have the buy-in I need,” Hart informed Brown in a March 21 email reviewed by Reuters.
Hart sent an optimistic email to Virgin Orbit’s 750 employees that day, most of whom had been furloughed to save money when the firm ceased operations earlier in March. Hart announced an “incremental restart” of activities in the email.
Operations would not resume.
According to the cease-and-desist letter reviewed by Reuters and the three people, who declined to be named due to the matter’s sensitivity, Virgin Orbit cut off contact with Brown in less than a week. In addition, it threatened legal action if he revealed confidential details about the potential investment.
Virgin Orbit’s unsuccessful attempt to escape bankruptcy is revealed through a never completed contract. Last Monday, the corporation filed for Chapter 11 after being valued at $3.8 billion in late 2022 and serving the U.S. military.
A former Boeing employee, Hart declined to comment on Brown’s conversations. Virgin Orbit’s 75% owner, Virgin Group, declined to comment. The consortium is financing Virgin Orbit’s bankruptcy sale.
The legal notification followed Brown’s March 23 CNBC interview in which he indicated he was in “final conversations” to finalize a $200 million Virgin Orbit investment within 24 hours. A corporate lawyer wrote that Brown exaggerated negotiations and violated a non-disclosure agreement.
After Brown’s CNBC interview, Virgin Orbit’s plummeting stock price rose more than 60%.
The TV interview followed a Reuters story that Brown was close to an agreement to invest in the firm, citing the term sheet signed by Hart and Brown and the March 24 closing date.
Three sources claimed the business discontinued communication with Brown on March 25 after discovering credibility difficulties. Executives found material that contradicted Brown’s background.
Brown denied misrepresentation in Reuters interviews last week. He stated Virgin Orbit had not supplied the details he needed to place $200 million into an escrow account as specified in the term sheet. However, Brown didn’t specify his wanted information, so Reuters couldn’t verify it.
“I definitely had the money,” Brown said.
Reuters identified significant contradictions in Brown’s CNBC and LinkedIn claims regarding his firms, investments, and contacts.
Brown told Reuters he had no Virgin Orbit shares and had not benefitted from his public offer and the short-lived stock price surge. “Matthew Brown” had 238 shares in the company’s Tuesday bankruptcy filing. Shares were $48 on Thursday.
Brown claimed the stated investor was different. Matt Brown.
Brown listed Hong Kong-based Hogshead Spouter and Hawaii-based Kona Private Capital as advisers or partners on LinkedIn, but Reuters could not discover company registrations.
Brown told Reuters he used offshore corporations without offering information. For example, he didn’t know Kona and Hogshead’s registration.
Brown told CNBC he collaborated with OpenAI. However, an OpenAI spokesman denied working with him.
Brown told Reuters he structured deals to protect investor confidentiality and “lay low below the radar.”
Dan McDermott, a former Hogshead Spouter colleague and Hong Kong Monetary Authority officer endorsed Brown’s Virgin Orbit method on LinkedIn. However, the central bank denied ever hiring McDermott.
McDermott denied LinkedIn’s background queries.
Brown worked for Houston-based Woods Family Office from 2008 to 2021, first as CEO handling $6 billion, and subsequently as a senior adviser. The family office, which lists Eric Woods as the principal, did not respond to a request for comment.
“I have nothing to say and my family office doesn’t,” Eric Woods told LinkedIn about his firm. “Although Matt is an adviser, we’re not associated with Matt’s purchase of Virgin, which I think this is about,” he said.
LinkedIn removed Woods’ and McDermott’s accounts after Reuters questioned their authenticity. LinkedIn did not detail the incidents but claimed it removed bogus accounts.
Brown declined to comment on the two men’s LinkedIn suspensions. “A fantastic man and a very successful man,” he said of Woods.
Brown told Reuters he produced the 2009 documentary “Loose Change,” which claimed the 9/11 attacks were a government plot.
The film’s producers, Korey Rowe and Dylan Avery stated they awarded Brown a producing credit. Avery told Reuters Brown gave him a camera. Rowe and Avery stated Brown failed to pay thousands of dollars in recording studio charges that he had verbally promised, so they deleted his credit on later film versions.
Brown stated his separation with the two “came down to a disagreement in personalities” after he offered “fair” cash.
Virgin Orbit declared bankruptcy Tuesday. After sending satellites into the water in January, it never returned.
Branson’s venture, which he spun out from Virgin Galactic in 2017 to compete with SpaceX, suffered a crushing defeat.
When funds were depleted, Virgin Group issued secured loans but no equity.
