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Gingrich Groups Landing in Bankruptcy

Gingrich Groups Landing in Bankruptcy May 25, 2012

From the department of schadenfreude, aka Reuters, comes a report that Newt Gingrich’s many cash cows for-profit companies and non-profit organizations are landing in bankruptcy court after his spectacularly unsuccessful run for president left him millions in debt.

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 Gingrich Group bankruptcy proceedings spotlight the remarkable reversal of fortune of the half-dozen organizations associated with Gingrich. The presidential contender recently ended his campaign $4.8 million in debt. A political nonprofit he headed, American Solutions for Winning the Future, which raised $52 million between its founding in 2007 and its dissolution last July, also ended in debt.

The decline of the health policy center began earlier than previously realized. When Gingrich began considering a presidential bid in early 2010, “the membership began to drop off,” according to Nancy Desmond, who served as managing partner of Gingrich Group LLC, which did business as the Center for Health Transformation. She was one of three owners of the company, but as the managing partner she alone testified at the May 9 meeting of creditors on the third floor of the Richard B. Russell Federal Building…

Desmond said revenues fell from just under $7 million in 2010 to $4 million in 2011 and then to less than $300,000 in the first quarter of this year. Some $1.2 million in dues that had been expected earlier this year never materialized because those members also decided not to renew. By March the center was no longer able to pay the rent on its suite of offices in Atlanta and Washington.

In April it declared bankruptcy, leaving almost $600,000 in debts to outside vendors, half of it to Chain Bridge Bank, a boutique lending institution in McLean, Virginia, headed by former Republican Senator Peter Fitzgerald of Illinois. The company also owes the $6.4 million to Gingrich and his wife, Callista, neither of whom could be reached for comment.

But that $6.4 million note was unsecured, which means it’s unlikely he’ll ever get paid. And that was the largest item listed on his financial disclosure forms earlier this year, making up most of his net worth. Poor Newt. I guess he’ll have to go back to sending scam awards to strip club owners.

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