New bombshell reports uncovered that Shady Tim Sheehy has been lying about his success as a businessman. In addition to misreporting his company in an effort to solidify contracts, it was revealed that Sheehy has been raking in millions in the face of the company’s financial struggles, the resignations of multiple board members, inaccurate books, and risk of defaulting on its debt.
This follows previous reporting on Sheehy’s former employees hitting him with a lawsuit and how his heavy reliance on government contracts while refusing to divest his ownership stake in the company could create conflicts of interest.
“Shady Sheehy has spent his campaign telling Montanans to vote for him because of his business prowess, but it’s clear that it was all a lie,” said End Citizens United Spokesperson Grace Silva. “He will do anything to further pad his own pockets—and the pockets of his billionaire buddies—even if it means misrepresenting his company to the federal government and lying to voters. This just proves that Shady Sheehy is driven purely by self-interest and simply cannot be trusted.”
NBC News: Tim Sheehy may turn the Senate red. But is he really a successful businessman?
Gretchen Morgenson, Laura Strickler, and Courtney Kube
08/09/24
Key sections:
- Sheehy, 38, promises “to fight for every hardworking Montanan and their family” and points to his job creation and entrepreneurial skills as among his qualifications for the Senate. Recent events at his company tell a more nuanced story and raise questions about the firm’s viability, its executive pay and its efforts to obtain government contracts.
- For a contest far from Wall Street, Sheehy’s campaign has attracted the attention of some of finance’s biggest names, including Ken Griffin, the billionaire founder of Citadel LLC, the hedge fund and trading powerhouse. Last fall, Griffin donated $5 million to a Super PAC called “More Jobs, Less Government” that has spent almost $11 million this year, or 96% of its receipts, supporting Sheehy, Federal Election Commission records show. They also show that Stephen Schwarzman, the billionaire co-founder of The Blackstone Group, a New York City-based private-equity giant that invested in Bridger, has given $5 million to the “More Jobs” Super PAC over the past year.
- In mid-June, an editorial in The Wall Street Journal echoed Griffin’s view, branding Sheehy’s company Bridger a success.
- Bridger’s filings with the federal government, however, undercut that acclaim. A few weeks before the glowing editorial, a May securities filing by the company noted “substantial doubt” about Bridger’s ability to continue operating as a “going concern” over the next year.
- More bad news came July 1 when Bridger warned that investors could not rely on its 2023 financial statement because it had materially miscalculated an earnings per share measure and would need to restate its results. Bridger also recently warned in regulatory filings that it was not in compliance with financial performance measures it promised to buyers of $160 million in industrial development bonds that it sold in 2022.
- A resident of Gallatin County, where Bridger is headquartered, Cohodes says he’s opining because Sheehy’s claims of business feats don’t add up.
- “Bridger Aerospace has been a success for insiders and the Park Avenue billionaires at Blackstone,” said Cohodes, who added that he has no stake in the firm’s stock. “Meanwhile, the company’s shareholders and bondholders are holding the bag. How does that help hardworking Montanans and their families?”
- In seeking to win government contracts, one Bridger unit Sheehy headed after receiving an investment from Blackstone certified itself as a socially and economically disadvantaged company, according to federal documents filed with the Small Business Administration.
- Meanwhile, Blackstone has cashed out most of its investment in Sheehy’s business.
- Last April, ahead of Bridger’s potential default warning, Sheehy and his brother Matthew Sheehy, a Bridger director, gave back company stock awards that had been valued at $30 million when they were received as part of its 2023 public offering.
- By the time the men returned the stock awards, the awards were worth roughly $15 million because Bridger’s shares had declined, regulatory filings show.
- Riding to his rescue in 2018, Sheehy reported, was none other than Schwarzman, Blackstone’s multibillionaire and a major Trump supporter.
- Bridger was struggling to find its footing and needed money to buy planes, Sheehy wrote in his book, when Blackstone agreed to make a $150 million investment in the company. According to a 2022 regulatory filing, Bridger took delivery of its first “Super Scooper” plane in 2020.
- In early June, Schwarzman contributed $4.6 million to the “More Jobs, Less Government” Super PAC that is throwing big support behind Sheehy, FEC documents show. Schwarzman’s contribution made up 34% of the PAC’s total receipts for the first six months of the year. Schwarzman also contributed $400,000 to the PAC last fall.
- Of the PAC’s $11.4 million in disbursements for the first six months of 2024, it has spent $10.9 million, or 96% of the total, supporting Sheehy’s campaign.
- While Blackstone employees support Sheehy’s campaign, the firm itself is in the process of exiting its profitable stake in Bridger. It cashed in much of its holding in 2022 after Bridger sold the $160 million of industrial development revenue bonds through Gallatin County, the bond offering shows.
- In 2027, Bridger must redeem the bonds, which were purchased by mutual funds and other institutional investors. Bridger pays 11.5% interest to bondholders, a debt load that has helped push the company’s interest expense in the most recent quarter to $5.9 million, higher than the company’s revenues of $5.5 million in the period, its financial statements show.
- Although Bridger generated $119 million in net losses in 2022 and 2023, company insiders, starting with Sheehy, have been paid well. In 2022, Sheehy’s cash and stock compensation neared $5 million, and last year, he received $2.5 million, Bridger’s proxy says. Matthew Sheehy received $1.8 million in cash and stock compensation in 2022 and 2023, the document shows.
- Shortly after Bridger’s May disclosure that it was out of compliance on commitments to bondholders, Todd Hirsch, one of Sheehy’s “crack team” at Blackstone, resigned from the Bridger board. At the same time, Blackstone gave up its right to name two directors to Bridger’s board going forward.
- Blackstone’s move to give up its board seats while it still held a stake in Bridger “isn’t something I’ve seen,” he said.
- Sure enough, on July 31, Bridger announced that Blackstone and other shareholders were selling out.
Washington Post: Montana GOP Senate candidate touts his business. It’s losing millions.
Beth Reinhard and Jonathan O’Connell
08/10/24
Key sections:
- Bridger is facing a cash crunch so dire that there is “substantial doubt about the Company’s ability to continue,” according to public filings that show the company lost $77.4 million last year and $20.1 million in the first three months of 2024. Several directors have left, including one who flagged concerns about internal auditing, as an unusually slow wildfire season in 2023 put the company at risk of defaulting on its debt.
- Sheehy, 38, has attracted national support largely on the strength of his biography as a war hero and entrepreneur, but his first campaign for public office has exposed some potential vulnerabilities.
- He has also emphasized his business experience, telling voters that he has signed “the front of the paycheck, not just the back” while condemning Congress for the ballooning national debt.
- “I’m a business owner,” Sheehy said during a March campaign event. “If my business isn’t doing well, I don’t get paid.”
- Yet amid Bridger’s significant losses, Sheehy has received millions of dollars in compensation. He received a $2.3 million bonus on top of a $149,000 base salary in 2023, according to SEC filings, and a bonus of $4.4 million and a $450,000 base salary in 2022, as the company lost $42.1 million. Sheehy received additional income leasing two planes to Bridger and co-owning a business that provides flight training, SEC filings show. Sheehy also sold a plane to the company for $3.9 million; the filings don’t detail if he turned a profit or loss.
- “That itself is not wrong, but it doesn’t look great,” said Dhierin-Perkash Bechai, an analyst at AeroAnalysis International, which covers the aerospace and defense industries, referring to Sheehy’s bonuses and additional income from Bridger. “While the company is bleeding cash, Sheehy is still making money.”
- Sheehy and his business partners also launched a drone company, Ascent Vision Technologies. A defense contractor bought Ascent for about $350 million in 2020, an “incredible” boost to its stakeholders, Sheehy wrote in his book. He personally netted about $75 million, Bloomberg reported.
- Bridger’s annual report for 2023 reflected significant challenges: more than $211 million in debt, the possibility of default on the $160 million bond deal and a violation of the terms of a $12.9 million bank loan.
- In another potentially troubling sign, the company said it had “identified material weaknesses in our internal control over financial reporting.” In other words, the company could not guarantee that its books were accurate, though Moeller said this disclaimer is not unusual among small, newly public companies getting their accounting up to speed.
- But in another indicator of the company’s hunger for cash, Bridger raised $9.2 million in April by selling common stock to directors and executive officers — a quicker and less expensive way to raise money than selling to the public, analysts following the company said.
- Sheehy, who is now campaigning full time, has a net worth spanning $102 million to $297 million, according to an analysis of his financial disclosure filed in June. He owns a home in Bozeman that property records show is valued at about $2.5 million, a 20,000-acre cattle ranch, rental property in Big Sky, Mont., and cabins in Polson, Mont.
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