RIO DE JANEIRO – Just a few year ago, flashy Brazilian billionaire Eike Batista was bragging that he would soon overpass Carlos Slim as the world's richest man. He even liked to show visitors his Mercedes-Benz McLaren — parked right in the living room of his mansion.
The fall has been deep and fast. Batista's OGX oil company filed for bankruptcy protection Wednesday in a stunning reverse for the champion speedboat racer who came to symbolize the country's economic boom with Brazilian flair.
Batista was born to privilege. His father was the mines and energy minister and also led what was then the state-run Vale mining company, which has since been privatized. The younger Batista made his first fortune in his 20s, scouring the Amazon to buy up gold, which he resold in Brazil's big cities and Europe.
Those beginnings led to his current conglomerate of oil, mining, infrastructure and real estate companies, all suffering as his once high-flying OBX faces possible liquidation.
Married for more than a decade to Luma de Oliveira, a former model and one of Brazil's most beloved Carnival queens with whom he had two sons, his life was as much fodder for celebrity scandal sheets as business pages.
Now 56, Eike Batista's fortune has reportedly dwindled to less than 1 percent of the $34.5 billion that Forbes magazine estimate he was worth in early 2012. He's ordered that his luxury yacht be cut up and sold for scrap.
His problems have extended into his personal life. In June, his son Thor, 21, was convicted of involuntary manslaughter for running over a slum-dwelling cyclist while driving the same model of Mercedes-Benz his father keeps near a family couch.
Critics contend Batista misled investors about the size of the oil fields that OGX had found in recent years and say his troubles are a new sign that Brazil won't soon see an end to its economic slide. The economy grew 7.5 percent in 2010, but then eked out just a 0.9 percent gain last year amid a downturn in world commodity prices and Brazilian consumer spending.
OGX didn't respond to requests for comment.
His star wasn't supposed to stop glittering so soon.
Just 18 months ago, President Dilma Rousseff attended a ceremony marking OGX's first offshore oil production and said resolutely that state-run oil company Petrobras would go into deep partnerships with Batista's firm.
"Eike is our standard, our expectation and, above all, the pride of Brazil when it comes to a businessman in the private sector," Rousseff told those in attendance.
Some say Batista's failure to deliver on producing offshore oil and the resulting inability to obtain more investor credit was a byproduct of a toughening economic environment as well as underlying weaknesses in his Batista's company.
"What's the phrase? When the tide goes out, you can see the man who is not wearing a bathing suit?" said Jefferson Finch, a Latin America analyst with the New York-based consulting firm Eurasia Group. "That's what's happened with Eike Batista."
Finch said that "investor enthusiasm started turning on Brazil around 2011" after five years of high hopes that South America's biggest nation had finally turned a corner and would make good on its longtime promise to become a perennial power with repeated years of strong growth.
"But if you look at the overall context, Brazil was never as promising as people said it was in 2006, when a lot of commentators were effervescent on Brazil, ignoring the structural challenges it faced," he said. "Now, Brazil is not as bad as all the negative commentary."
Others said Batista's fall has damaged the nation's reputation.
"The entire thing has had a really negative impact on Brazil's image and reinforces the need for stronger corporate governance in this country," said Cassia Pontes, an oil industry analyst with the Rio-based Lopes Filho consulting firm. "Reality didn't live up to the exaggerated expectations created by Batista."
OGX, created in 2007, didn't deliver on its promises to produce significant amounts of offshore oil even though it reported many finds since 2010, when its market value reached $34 billion. In the first half of this year, the company averaged output of just 8,500 barrels a day and racked up more than $2.5 billion in losses.
Critics say Batista has lied to investors, citing a correction made earlier this month for a promising OGX offshore field. In 2012, OGX said the field held nearly 1 billion barrels, but a few weeks ago it lowered that projection to 285 million barrels, too late for those who plowed cash into buying the company's stock.
Miriam Leitao, one of Brazil's top economic columnists, wrote on her blog for the O Globo newspaper Wednesday that Batista's "main error was to declare that he had what he didn't, to mislead the investor."
"He's always exaggerated the potential of his companies and thus increased his stock. ... He built a house of cards," Leitao wrote.
With the filing for bankruptcy protection before a Rio de Janeiro state court, Batista's OGX Petroleo e Gas Participacoes SA, part of his EBX Group conglomerate, now has 60 days to come up with a restructuring plan. Investors holding $3.6 billion in debt will then have 180 days to accept or reject the plan. If it's not accepted, the company will be liquidated.
For Henrique Matias Lorenzo, a 27-year-old graphic designer in Sao Paulo, the fall of Brazil's best-known business playboy should serve as a slap of reality for his country.
"What happened was that Eike had excessive optimism, and that spread to others who came to believe in a project that wasn't based on solid figures and facts," Lorenzo said.
Based on reporting by The Associated Press.