Don’t you just feel bad that poor Newt Gingrich has gone bankrupt?
Before you upchuck your breakfast cereal all over your lap, the former long shot Republican presidential candidate (OK, he didn’t have a chance in hell of winning), has gone from being an extremely wealthy man to now being mired in debt and is in the throes of embarrassing bankruptcy.
When the Georgia flamethrower became the Republican presidential nomination in May 2011, Gingrich was leading a small empire commonly known as Newt Inc., which included both for-profit consultancies and nonprofit foundations. Combined, these entangled ventures pulled in more than $110 million over the past decade. Now the enterprise is mired in debt, as is Gingrich’s campaign fund. According to media reports, a bankruptcy proceeding is 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 Gingrichs’ 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 health care 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.
Remember this: this is the same guy who was charging folks $50 to take a picture with him.