Bankruptcy
Reksten's declared goal was to become the world's greatest shipping magnate before turning 80, which would happen in 1977. This agenda seems to have reduced his sound judgment to a level where he bought the fleet of shipowner Erling Dekke Næss in the spring of 1973 for $ 208 million - 750 million kroner. Rather a triumph for Reksten, Næss being the one who had him removed from Nortraship for irregularities back during WWII. The purchase however was paid for by the profit Reksten had illegally removed from Norway, resulting in him being forced to deny that he was the actual owner. His actions later in 1973 reflect an almost maniacal streak, when he placed an order with Akers mekaniske of seven ships worth 2.3 billion kroner, and started imagining tank ships of one million tons. In the autumn of 1973 he controlled the largest fortune ever owned by a Norwegian. The press celebrated him as one of the world's most successful investors; but in most of Norwegian economic life he and his methods were generally disliked. Even Akers mekaniske that had delivered most of his fleet, frowned upon him. He had fallen out with the five children from his first marriage with Bjørg Elisabeth. From 1952 until his death he was married to Carol Montgomery, with whom he had one child, Grace Reksten, his sole heir.
The same year his empire started crumbling. Reksten was hit hard by the 1973 oil crisis. The main problem was that many other tank magnates had begun to share his optimism, expecting a further increase in freight rates. He was forced to cancel his billion contract with Aker, resulting in a fine of 320 million kroner. He barely avoided bankruptcy in 1976, by fetching in 100 million kroner from abroad, and have the Norwegian state guarantee for a loan of almost one billion kroner in return for taking over a great portion of the company’s stocks.
In 1979 he was tried in Bergen courthouse for tax fraud, but acquitted on all eight points except one. Reksten was at the time badly marked by his cancer. The following year he died of his disease, was declared bankrupt post mortem, while the bankruptcy proceedings went on until 1993. After his death it was easier to trace the hidden fortune abroad. The accountancy firm Ernst & Young estimated the size of this fortune to around 213 millioner kroner. A compromise in 1990 with sole heiress Grace Reksten Skaugen put an end to the hunt for the hidden means: 60 million kroner were transferred, along with a health centre on Lanzarote with an estimated value of 10-12 millioner kroner. The further fate of Reksten's fortune abroad - if it exists - is unknown.
Read more about this topic: Hilmar Reksten
Famous quotes containing the word bankruptcy:
“A woman’s whole life is a history of the affections. The heart is her world: it is there her ambition strives for empire; it is there her avarice seeks for hidden treasures. She sends forth her sympathies on adventure; she embarks her whole soul on the traffic of affection; and if shipwrecked, her case is hopeless—for it is a bankruptcy of the heart.”
—Washington Irving (1783–1859)
“You must get your living by loving. But as it is said of the merchants that ninety-seven in a hundred fail, so the life of men generally, tried by this standard, is a failure, and bankruptcy may be surely prophesied.”
—Henry David Thoreau (1817–1862)
“The heritage of the American Revolution is forgotten, and the American government, for better and for worse, has entered into the heritage of Europe as though it were its patrimony—unaware, alas, of the fact that Europe’s declining power was preceded and accompanied by political bankruptcy, the bankruptcy of the nation-state and its concept of sovereignty.”
—Hannah Arendt (1906–1975)