It’s not how much you have. It’s how much you owe.
As millionaires ranging from Annie Liebovitz to Mike Tyson have discovered, you can earn a lot of money and still run out of it. The latest tycoon to hit the skids is Halsey Minor, an entrepreneur who helped build CNET, Salesforce (CRM), Rhapsody and several other breakthrough digital companies. After amassing a fortune of perhaps $300 million, Minor declared bankruptcy recently in Los Angeles, listing liabilities of $50 million to $100 million and assets somewhere between $10 million and $50 million.
As a tech entrepreneur, Minor seemed to have had a magic touch. CBS bought CNET in 2008 for $1.8 billion. Salesforce went public and is now worth $25 billion. Google bought another Minor firm for $50 million in 2007.
Such success might have convinced Minor his business judgment was infallible as he branched into other fields, such as art and real estate. But those ventures turned out to be his undoing. A hospitality company, Minor Family Hotels, went bankrupt in 2010. A big hotel project in Charlottesville, Va., still sits unfinished, marring the skyline; it was recently auctioned for a fraction of its original value to another developer.
Minor also fell far behind on payments on several other extravagant properties, including a colonial-era plantation and a vast horse farm, both in his native Virginia, plus mansions in Los Angeles and San Francisco. His properties are now embroiled in litigation over unpaid debts and back taxes, adding to his financial woes.
Minor still lived lavishly, even while struggling to pay the mortgage(s). He put down a deposit on a new Gulfstream jet, bought million-dollar art and thoroughbred horses, and announced a plan to purchase several prominent racetracks and personally reverse the decline of thoroughbred racing. A 2006 divorce cost him a reported $50 million, yet he kept spending and making plans to spend more.
Minor’s bankruptcy filing is likely to lead to a liquidation of his assets, in order to pay something back to his many creditors. He’s philosophical about the reversal of fortune, however. “If you win some, you are going to lose some, too,” he wrote in an email to the Wall Street Journal. “A case might be made I should never have strayed from technology. However, I like doing things outside my comfort zone.”
That’s fortunate, because Halsey Minor will now have to do something else that may make him uncomfortable: Live within his means.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
- Halsey Minor