Newt Gingrich’s Private Ventures Are Going Bankrupt
When he entered the race for the Republican presidential nomination in May 2011, Newt Gingrich was the prosperous head of a small empire commonly known as Newt Inc, which included both for-profit consultancies and nonprofit foundations. Altogether, these entwined ventures pulled in more than $110 million over the past decade. Now the vestiges of this empire are mired in debt, as is Gingrich’s campaign fund. A bankruptcy proceeding under way in Atlanta will determine whether the one company still owned by Callista Gingrich, Gingrich Productions, will lose an expected payout that now constitutes the bulk of the Gingriches’ net worth.
The bankrupt corporation is the Center for Health Transformation, whose revenues came from the hefty dues paid by corporations for assistance in formulating and promoting certain healthcare policies.
By the time Gingrich sold his majority stake in the center to three associates last May, it had been hemorrhaging clients and facing “cash-flow issues” for roughly a year, according to testimony on May 9 before a U.S. bankruptcy trustee in Atlanta. With the candidate poised to sever ties with the center for the sake of his run for office, it faced an even less certain future.
Nonetheless the three longtime colleagues agreed to pay Gingrich $6.4 million for his stake in the center.
The purchase of Gingrich’s share was made with a promissory note to be paid in monthly installments of $100,000 over six years. Little of that debt had been paid when the center declared bankruptcy last month. As an unsecured debt, the note, it now appears, is likely to go unpaid.
This is the same guy who was charging folks $50 to take a picture with him. SMH.