Reversal of fortune: Halsey Minor declares personal bankruptcy
It's official. Halsey Minor has burned up his fortune, once estimated at nearly $400 million.
A spate of vanity investments and the litigation that followed appear to have pushed the high-flying technology entrepreneur into bankruptcy court. The Charlottesville native, once considered an icon of entrepreneurism, threw in his proverbial towel Friday, May 31, when he voluntarily filed for Chapter 7 protection from his creditors. In his May 24 filing in a federal court in Los Angeles, Minor cites debts measuring in the $50 million to $100 million range while his assets fall below the $50 million mark. Minor himself now appears to concede what his critics have long claimed: that he stretched his finances past the point of insolvency by buying houses, racehorses, and artworks.
"A case might be made I should never have strayed from technology," Minor says in an electronic message to a reporter. "However, I like doing things outside my comfort zone, and I believe that willingness in part accounts for my tech successes."
His tech successes were legion. In the early 1990s, he co-founded one of the few internet companies to turn a profit and then survive the dot-com/dot-bomb era: CNET Networks, which CBS purchased four years ago for nearly $2 billion. Minor also played instrumental early roles in the companies that would become known as Salesforce.com, Rhapsody, NBCi, and GoogleVoice.
In recent years, however, his investment mosaic began expanding to include multi-million-dollar art collections, and he picked up four dwellings priced at eight figures each. There was a 1960s modernist masterpiece in L.A., a neoclassical mansion in the tony Pacific Heights district of San Francisco, a former museum near Colonial Williamsburg, and a view-heavy horse farm right here in Western Albemarle.
His purchases seemed to draw legal indignities. Two auction houses sued him for failing to pay for artworks. San Francisco officials threatened to condemn the house modeled after Marie Antoinette's Petit Trianon. Even Fox Ridge, the hometown farm with the Blue Ridge mountain backdrop, fell into foreclosure proceedings. As his empire crumbled, California placed him atop its list of taxpayer deadbeats.
And yet the business dervish never lost his need for speed. Shortly before the national financial turmoil of 2008, Minor ordered a brand new $69 million Gulfstream private jet. (By contrast, when Donald Trump arrived to tout his buyout of another bankrupt businessperson, Patricia Kluge, the celebrity developer and presidential noise-maker arrived on a Sikorsky helicopter that was two decades old.)
In recent months, two of Minor's corporate bankruptcies have kept federal courts in Virginia busy. The one styled Minor Family Hotels LLC should wrap in early June with stiffed contractors sharing about half of the $6.25 million an Atlanta developer paid for the moribund Landmark hotel project on the Charlottesville Downtown Mall.
In Williamsburg, the historic riverfront estate known as Carter's Grove has likewise been wrested away from Minor amid allegations that he dodged depositions and failed to supply court-ordered information. While he claimed to be caring for a sick child, the court recently hit him with a contempt order. (The filings in the Williamsburg debacle also showed that despite losing more than a million-dollar deposit on a Gulfstream he never received, Minor would lease private planes instead of flying commercial.)
Minor didn't lose all his fights. He won a judgement in a California court that the modernist house contained hidden water damage; he won a pyrrhic victory from an arbitrator in the Landmark hotel dispute; and he convinced a jury that Christie's auction house overreached in its tactics to get him to pay for his artworks.
Yet the seemingly perpetual state of litigation took a toll. Of the 63 creditors listed in the initial bankruptcy filing, no fewer than 18 are law firms including DLA Piper. The firm, with operations across the globe, boldly petitioned a court in Charlottesville to bill $790 an hour when Minor already owed millions. Now, its $5 million-plus bill will likely never be paid, as Minor's personal bankruptcy filing predicts that "there will be no funds available to unsecured creditors."
Charlottesville-based legal analyst David Heilberg refers to Chapter 7 filings as "total liquidation." That means the property will be sold off, but any proceeds will go first to the mortage-holders, so little companies like Intrastate Pest Control, Tiger Fuel, and a Crozet-based horse-training center will likely never see a dime. Additional creditors include Minor's mother, wife, and ex-wife.
Minor now lives with his second wife and their five children in a rented house a block off Wilshire Boulevard in Beverly Hills. The 48-year-old has indicated that he's already thinking about a new project, and he sounds a philosophical note about his past. "The seeds of my every failure," he says, "can be found in my every success, and the seeds of my every success can be found in my every failure."
For Bill Shmidheiser, a Harrisonburg lawyer representing one of the soon-to-be-paid contractors on the Landmark hotel project, Minor's bankruptcy has him ruminating too.
"It's another one of those cases we see of somebody who had enough money to be set for life, and then it's gone," says Shmidheiser. "I don't think I'd blow it if I had the chance, but how do I know?"