MD Helicopters’ Lynn Tilton
Interview by Mark Huber - April 1, 2009
IN 2000, after more than two decades of diverse Wall Street experience, Lynn Tilton started Patriarch Partners, a private equity firm that specializes in buying and fixing distressed companies. Today, Patriarch’s diverse multibillion-dollar portfolio holds interests in more than 65 companies worldwide, including Arizona-based MD Helicopters, which Tilton’s firm bought in 2005 and brought back to life from near liquidation.
Tilton, who currently serves as CEO of MD, predicted the current economic crisis more than two years ago. She faults a reliance on “synthetic” finances, which she says created the illusion of economic growth while helping to dismantle much of America’s manufacturing sector.
Prior to founding Patriarch Partners, Tilton was an executive at Long Drive Management Trust, a company that managed distressed debt. Earlier, she was executive managing director of Papillon Partners, a firm she founded to offer research, valuation and other services to sellers of bank debt. Before launching Papillon, Tilton spent many years in corporate finance and banking positions at such firms as Morgan Stanley, Goldman Sachs and Merrill Lynch.
Tilton maintains a schedule that even an Olympic athlete would likely find grueling.
Her Gulfstream 200 and MD 902 Explorer helicopter help. So do her drive and combative spirit. She spars with journalists, revels in being “disrespected by my peer group” and delights in defying the predictions of industry experts. “I like to be the little engine that could,” Tilton said.
When did you start using corporate jets?
I had flown on NetJets [since] around 2002, then switched to my own corporate jet in the latter part of 2006 and it is invaluable every day. I spend 80 to 90 percent of my life on the road and probably 80 percent of the deals that I do I wouldn’t do if I didn’t have a jet because my body just couldn’t take it. I work 20 hours a day, seven days a week.
It has allowed me to take many meetings I would otherwise not have been able to that resulted in great transactions and great relationships. I actually used that corporate jet to fly around and buy parts for MD helicopters when we had 265 [helicopters] on the ground, and I knew the only way to get this company back was to make sure those helicopters were in the air. So that jet often went to pick up parts, at a loss, just to put aircraft back in the air for our customers.
MD Helicopters turned profitable in the fourth quarter of 2007. How was 2008?
We could have had a better year had we not fallen back on our deliveries. We expected to deliver more than 60 aircraft and [were], I think, 10 aircraft short because we had a little bit of a setback on some parts that kept aircraft on the line too long. It is because I [re]built this company bottom up that we understand our cost on every aircraft. We make money on every aircraft we sell and we are still in very good shape.
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