Virgin Orbit's Legal Showdown: Bankruptcy Triggers Threat of Action Against Prospective Investor

Author: Vandana Singh | April 10, 2023 10:29am

• Virgin Orbit Holdings Inc (NASDAQ:VORB) issued a legal notice to a little-known investor, Matthew Brown, who appeared to offer a $200 million rescue for the bankrupt satellite firm.
• The potential deal with Brown unraveled in less than a week, with Virgin Orbit walking away and threatening to take legal action against him if he revealed confidential details about the potential investment, according to the cease-and-desist letter reviewed by Reuters.
• The notice was in response to Brown's interview on CNBC on March 23 when he said he was in "final discussions" to close a $200 million investment in Virgin Orbit within 24 hours. 
• The TV interview followed a report from Reuters that said Brown was close to a proposed investment in the company, citing the term sheet signed by Virgin Orbit Chief Executive Dan Hart and Brown and the planned closing date of March 24.
• Related Content: Richard Branson's Virgin Orbit Said To Extend Operations Halt After $200M Deal Talks Collapse.
• The letter from a lawyer for the company said Brown had overstated the nature of talks and breached a non-disclosure agreement.
• Reuters reported discrepancies in several key elements of Brown's assertions on CNBC or LinkedIn about the companies where he says he had worked, his investments, and associates.
• But in interviews with Reuters over the past week, Brown dismissed accusations he had misrepresented himself. He said Virgin Orbit had not provided the information he needed.
• Price Action: VORB shares are down 13.30% at $0.18 on the last check Monday.
• Photo via Wikimedia Commons

Posted In: VORB