Vincent Bendix: The Largest Fortune, and the Most Complete Collapse

Vincent Bendix: The Largest Fortune, and the Most Complete Collapse

The fortune: Vincent Hugo Bendix brought his starter-drive company to South Bend in 1924 and built the Bendix Corporation on it (its business entry is in the Business section). At the peak, his is the largest personal fortune in this section, and unusually it is sized by a court: the Seventh Circuit's summary of his bankruptcy case, In re Bendix (1942), describes him as "a wealthy businessman with a net worth exceeding thirty-eight million dollars in 1929." The fortune's turning transaction is likewise priced in print: at the 1928–29 formation of Bendix Aviation Corporation, General Motors purchased a quarter interest for, in the biographical record's words, "$15,000,000 cash and other considerations." For the round $50 million figure that later retelling sometimes attaches to him, no carrier was found in the sources consulted; the documented peak is the court record's $38 million and upward, and that is what is printed.

The spending: The fortune showed in houses. In July 1928 he bought Chicago's Potter Palmer mansion for $3,000,000 (Encyclopedia.com's biographical entry), planning a $25,000,000 hotel on the site — a plan, never a building — and was forced to sell. In South Bend he bought Elm Court in 1928, the house Clement Studebaker Jr. had built in 1908, renamed it Chateau Bendix, and reportedly spent $30,000 "simply to erect imported French gates" for it, the adverb being the source's own; a Palm Beach ocean-front estate followed in 1929 at $250,000, and his 1932 divorce from Elizabeth Channon carried a reported settlement of $2,000,000. He put his money into the city's bank as well: with E. M. Morris he supplied the new capital of the combined First National in 1931–32, $500,000 each, on the bank's own published account — the Bendix and Morris entries in this section meet there.

The collapse: General Motors, which had been accumulating Bendix stock, began taking over the company in 1937 — a quarter of a million dollars a month was being lost, by the biographical account — though Bendix remained chairman of Bendix Aviation until 1942. The personal end came in a South Bend courtroom: on an involuntary petition by holders of Chicago real-estate bonds he had personally guaranteed, he was adjudicated bankrupt in federal court at South Bend in June 1939 — declared on 8 June by the referee in bankruptcy, on the contemporary newspaper report. What he owed and owned was printed three ways, and all three are carried: Time's account (5 June 1939, as carried in the biographical entry) gives liabilities of $14,000,000 against assets of $1,000,000 — "This is the biggest blow of my life," he told Time; the American National Biography-derived entry gives assets of about $2,000,000 against the same $14,000,000 of liabilities; and the petitioners' own contention, in the contemporary press, was liabilities exceeding $13,000,000 against assets of less than $500,000. After an eight-day hearing that produced 882 pages of evidence, the referee granted his discharge, the district court upheld it, and the Seventh Circuit affirmed in 1942, finding his loss of assets satisfactorily explained. Elm Court was sold to the Sisters of St. Joseph in 1943. He died in New York on 27 March 1945, of coronary thrombosis, aged sixty-three, at work on a helicopter venture — the inventor of the self-engaging starter drive, whose South Bend corporation kept his name and outlived his fortune entire.

Sources:

1. In re Bendix, U.S. Court of Appeals, Seventh Circuit (1942), case summary — net worth "exceeding thirty-eight million dollars in 1929"; the involuntary adjudication of June 1939; the discharge affirmed.
2. Encyclopedia.com / American National Biography-derived biography of Vincent Bendix — the $15,000,000 General Motors purchase; the Palmer mansion at $3,000,000 (July 1928) and the $25,000,000 hotel plan; the $30,000 gates, "reportedly"; the Palm Beach house at $250,000 (1929); the divorce settlement "reportedly $2,000,000" (1932); the 1937 takeover at $250,000 a month of losses; Time's bankruptcy figures of $14,000,000 and $1,000,000 and Bendix's words to Time; assets of about $2,000,000 in the same entry's second account; the death of 27 March 1945.
3. Contemporary newspaper report, June 1939 (Oregon News archive) — the petition of 24 May in federal court at South Bend; the declaration of 8 June 1939 by Referee Alvin F. Marsh; the petitioners' contention of liabilities over $13,000,000 and assets under $500,000.
4. University of Notre Dame, Building South Bend; South Bend Voice, 20 January 2015 — Elm Court: built 1908 for Clement Studebaker Jr., bought by Bendix 1928, sold to the Sisters of St. Joseph 1943.
5. 1st Source Corporation, 2013 annual report — Bendix and Morris's $500,000 each of new capital in the 1931–32 combination, as carried in the Banks section.