28 Feb. 2009
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A Billion Here, a Billion There...

Half a Billion

Two guys - Paul Greenwood and Stephen Walsh - "were arrested Wednesday on charges of looting their investment funds for over a decade to buy horses, collectibles and other personal items."  I'd tell you more, but with only half a billion dollars missing or whatever, I didn't bother reading the rest.

Two Billion

Eclipse Aviation has just gone from Chapter 11 bankruptcy to Chapter 7.  That means that, instead of continuing to try to get financing to build their small jet aircraft, they will liquidate their assets for the benefit of their creditors.  Here is a partial list of those who were screwed by the Eclipse dream of an under-one-megabuck personal jet:

  • Albuquerque, New Mexico, who provided tax breaks and land

  • The 800 or so employees who were just furloughed for a day and laid of permanently the next day

  • The stockholders, bondholders, and noteholders

  • The "customers" who had given the company deposits for aircraft

  • Better or perhaps worse off, the customers who actually have received the now-orphaned aircraft

Here's a shudda/cudda/didn't from me, personally.  We might have been on the list above, as a "customer" or a customer, were it not for an accident of fate.  When the Eclipse program was just beginning a decade ago, my company, an avionics manufacturer and vendor, was on an early list of those interested in purchasing an Eclipse jet.  As the program firmed up, they started taking orders and deposits, and I was told that, as an early participant, we could get a "delivery position" among the very first.  How intriguing!  Of course it was Big Bux, and we had to think about it very carefully.  I had to think especially carefully since I would be the de facto "chief pilot."   

First there was the deposit escrow program.  Deposits would not be held by a true financial intermediary.  Rather, they would be tied up in some sort of factory financing.  I asked if the deposit would be refundable in case I was no longer eligible to fly for medical reasons.  (Anything can happen in five years; fortunately nothing did.)  Answer:  "No."  Finally, after an experience flying in a friend's Piper Malibu, I asked about cockpit height.  I'm tall, and my Malibu experience involved trying to make room for the headphone band between the top of my head and the bottom of the aircraft's headliner.  I didn't want an aircraft that required me to have surgery in such a critical area to be able to operate it.  When no reassurance on that score was forthcoming, we gave up the notion. 

A disadvantage of being tall is that I was disqualified from being a space shuttle pilot.  Making up for that, it saved us from the colossal blunder that buying an Eclipse Jet would have turned out to be.  (My friend with the Malibu, far more of an aviator than I'll ever be, was skeptical from the start.  Ian:  You were right.)

Eight Billion

This one isn't as fabulous as the $50 billion Madoff scandal which is taking up all the newsprint, a term that appears to be on its way to obsolescence.  It seems that a guy named Stanford may have been dancing the Ponzi with the island nation of Antigua (and Barbuda).  So far, few factual details have come out, but it involves the usual cast of investors with (or withoutnobody knows yet) frozen funds, and a seemingly fine upstanding guy who was the hero to many until he fell under suspicion.  In this case, there's also a whiff of corrupt (as opposed to inept) government officials.  At only eight billion dollars, nobody seems to be paying much attention except, of course those who lost their money, and me.  I am determined to keep these clippings off my desk!  This one has the word on Antigua's politicians: "The idea that our politicians are any more corrupt than politicians anywhere else is just not true."  Presumably this will be of comfort to those whose savings and investments are in jeopardy. 

And, of course, those who have their own politicians.

WSJ Article on Stanford scandal and Antigua - 23 Feb. 2009

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