Halsey Minor, the 44-year-old founder of the tech news company CNet, is currently being sued for $60 million dollars, by a variety of creditors, at least one of which suggests that he doesn’t have the money to pay what he owes.
If true, the speed at which Minor has built up, then torn through, his assets is breathtaking.
As readers of this column will likely know, in recent years, Minor has been running Minor Ventures in San Francisco, a venture capital fund that Minor has funded himself. He’s also been living like a billionaire, a point I made in a Portfolio magazine profile of Minor last fall.
There’s little question that Minor has done exceedingly well for himself at varying points in his career. At age 35, he walked away from CNet in 2000 with a stake worth well over $100 million. Minor made another $300 million as an early investor in Salesforce.com, though he and his first wife Deborah split those assets when they divorced in 2006.
Yet in recent years, Minor has been burning money as if he were Salesforce CEO Marc Benioff himself. In addition to a sprawling Charlottesville, Virginia estate where I interviewed Minor a year ago, Minor has purchased since 2006 a $15.3 million Georgian-style mansion 120 miles away in Williamsburg, Va., a $20 million glass-lined home in Bel Air, and another $22 million, 18,000-square-foot manor in San Francisco into which he planned to invest an additional $15 million.
As of last year, Minor was also planning to sink $30 million into a nine-story luxury hotel slated to open in downtown Charlottesville this summer, buying up tens of milliond of dollars’ worth of art, and paying celebrity decorator Michael Smith to design the interiors of all of his new properties. (Smith’s other clients include Rupert Murdoch and Steven Spielberg. He’s also the guy who charged former Merrill Lynch CEO John Thain roughly $800,000 to redecorate his office last year, even as Merrill faced a financial crisis.)
Last fall, Minor took issue with my Portfolio story, telling its editors over numerous emails that the implication that he’s been recklessly extravagant “exposed” my “total lack of research and insight.”
Minor’s fortunes have seemed to turn since then.
Though Minor Ventures has enjoyed one lucrative exit via Grand Central (Minor paid $4 million for half the company; Google acquired it in 2007 for $50 million), it more recently suffered a public flameout with 8020 Publishing, which generated glossy, user-generated magazines, and on which Minor spared no expense.
Not only did Minor invest low double-digit millions into the endeavor, but he also spent lavishly, including on the salary of Mitch Fox, a former Conde Nast publisher who he hired last January at $500,000 a year to run the company. By this January, Fox had announced that the company would shut down; in March, its assets were transferred in a fire sale to a group of private investors.
Minor has been trying to shed his Bel-Air mansion at a huge loss. Last summer, he listed the 7,500-square-foot spread for $11.4 million — substantially less than the $20 million he paid for it in 2006 — after losing a suit against its previous owner over allegedly undisclosed and serious issues with the house.
Worse, Minor is embroiled in at least five lawsuits at the moment. Minor most recently filed suit last month to wrest control of Hialeah Racetrack in Florida away from it owner, who refused to sell him the track last year. (Minor is now arguing that the public rightfully owns the badly damaged and, for now, closed track, which will cost many tens of millions of dollars to restore.)
The other suits date back to last fall. The auction house Sotheby’s, for one, is suing over Minor’s refusal to pay for three paintings he purchased in May for $16.8 million. So is Christie’s, another venerable auction house; it says Minor failed to pay for $7 million in paintings that he bid on in July.
Work on Minor’s Landmark Hotel in downtown Charlottesville also came to an abrupt halt late last year, when Minor stopped making payments on the $23.7 million loan he took from Atlanta-based Silverton Bank. Last month, Silverton filed a lawsuit, saying Minor has missed $10.5 million in payments so far.
Then there’s Merrill Lynch, which filed suit against Minor in late December, claiming Minor borrowed $25 million from the bank in late 2007 and has not only not paid it back but that he’s also sold the various pieces of his art collection that constituted the collateral for the loan.
Minor says that in every instance, the other party is to blame. He says Sotheby’s didn’t disclose an interest in one work that would have affected its $9.6 million purchase price. Minor is also suing Christie’s, saying it had hampered his efforts to sell seven Richard Prince paintings, whose value dropped while in Christie’s custody. In Minor’s countersuit against Silverton, he asserts it’s the bank’s fault that the hotel deal has fallen apart, that it simply “stopped paying.” And in his “defendant’s answer” to Merrill Lynch, Minor responds that Merrill’s “bad faith” actions around his account, including freezing it last fall, were “particularly suspicious given the precarious financial state of [Merrill Lynch] at that time.”
There’s little doubt that Minor, like so many others, has been a victim of the economic downturn. It’s also clear that Minor — widely hailed as brilliant by those who’ve worked with him – either has a serious spending problem, or was anticipating an enormous payday that has yet to come.
As The Hook, Charlottesville’s weekly newspaper reported last week, in addition to his sundry other commitments, Minor put down a $3 million deposit last June for a $58.5 million Gulfstream G650 jet, a massive upgrade from the Challenger 603 jet he has been flying between California and Virginia in recent years. Apparently, last December, Minor asked for half his deposit back on the condition that he pay it back by January’s end or forfeit the other $1.5 million.
Now, that money is gone, too.