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Trump's finances (NO POLITICS!)

bolverk

By bolverk
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bolverk

bolverk 29780

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Given there are lots of folks on this board with a good deal of bidness and finance experience, I'd like to know what the collective, conventional wisdom is on his future financial situation.

Here's a nice refresher on what the picture currently looks like (tried to [redact] any references to politics):

The Financial Minefield Awaiting an Ex-President Trump

Not long after he strides across the White House grounds Wednesday morning for the last time as president, Donald J. Trump will step into a financial minefield that appears to be unlike anything he has faced since his earlier brushes with collapse.

The tax records that he has long fought to keep hidden, revealed in a New York Times investigation last September, detailed his financial challenges:

Many of his resorts were losing millions of dollars a year even before the pandemic struck. Hundreds of millions of dollars in loans, which he personally guaranteed, must be repaid within a few years. He has burned through much of his cash and easy-to-sell assets. And a decade-old I.R.S. audit threatens to cost him more than $100 million to resolve.

In his earlier dark moments, Mr. Trump was able to rescue businesses he runs with multimillion-dollar infusions from his father or licensing deals borne of his television celebrity. Those lifelines are gone. And his [redacted] has steadily eroded the mainstream marketability of the brand that is at the heart of his business.

That trend has only accelerated with his [redacted] the outcome of the [redacted], which culminated in the Jan. 6 assault on the Capitol. In its wake, his last-ditch lender vowed to cut him off. The P.G.A. canceled an upcoming championship at a Trump golf course, and New York City moved to strip him of contracts to run several venues.

Mr. Trump’s family has portrayed his departure from office as opening new opportunities that were closed off while he was president. His son Eric, who has helped run the Trump Organization, recently told The Times that the company expected significant demand for overseas branding deals involving Mr. Trump. The family has also considered starting a media company to connect with his supporters.

“There has never been a [redacted] figure with more support or energy behind them than my father,” Eric Trump said in a statement. “There will be no shortage of incredible opportunities in real estate and beyond.”

But without a new lender, or a new line of revenue that does not require a large investment of time and money, the soon-to-be-former president is likely to face hard choices, including possibly being pinched into selling underperforming golf courses or his hotel in the Old Post Office Building in Washington.

“Trump is so reputationally [redacted] that a lot of financial institutions won’t want to do business with him,” said Adam J. Levitin, a law professor at Georgetown University who focuses on finance and bankruptcy.

And while Mr. Trump maintains a vast and devoted following among working-class [redacted], they are not, for the most part, the future clientele of the resorts that became magnets for suitors seeking to rub shoulders, or win favors, from a sitting president.

Spoiler

 

Even in defeat, Mr. Trump has raised more than $250 million in [redacted] donations since the election. Yet while some of that money could be spent in ways that artfully, or aggressively, intermingle expenses on [redacted] work with personal and business costs, campaign finance laws would not allow Mr. Trump to use the entire amount to buttress his businesses.

After prior challenges, Mr. Trump portrayed himself as a comeback kid, someone who independently rose above financial adversity by striking fabulous new deals. What he hid from view was the degree to which his father’s fortune and a second fortune of entertainment money — the combined equivalent today of nearly $1 billion — provided a reservoir of cash that could cover repeated failures.

In the late 1980s, as his hodgepodge empire of casinos, hotels, an airline and a football team began to collapse under the weight of excessive debt and high expenses, Mr. Trump’s father secretly stepped in, covering a $3 million interest payment here, a $15 million loss on a new apartment building there.

Later, after the financial crisis that began in 2008, Mr. Trump defaulted on huge loans on his Chicago tower, much of his commercial space went empty and his casinos neared another bankruptcy. Though disaster loomed for the businesses he was running, Mr. Trump collected more than $154 million from 2008 through 2011 from “The Apprentice” and licensing his name for use on projects run by other people.

He received the last multimillion-dollar share of his inheritance about two years ago. And the wellspring of entertainment riches had nearly dried up by the time he entered [redacted], falling from profits in excess of $50 million during peak years to below $3 million in 2018. (Of course, not paying his debts also played a significant role in both turnarounds.)

The Times obtained tax-return data for Mr. Trump spanning more than two decades, including information from his personal returns through 2017, and from his business returns through 2018. The records show that many of his businesses have rarely, if ever, stood on their own.

His three golf resorts in Scotland and Ireland, for example, recorded steep and consistent cash losses. Through 2018, Mr. Trump pumped an additional $66 million of cash into the three resorts in the years since they had reopened, helping keep them afloat.

The Trump International Hotel in Washington, which opened in 2016, posted cash losses each year through 2018. Mr. Trump put $17.6 million more into the hotel during those years, on top of his original investment. And the situation likely grew more bleak last year. Since the pandemic struck, the hotel has opened for overnight guests, but the bar, a popular meeting spot for government officials and Trump supporters, remains closed.

As his entertainment fortunes faded, Mr. Trump filled part of the resulting gap with a $100 million mortgage on Trump Tower’s commercial space, and by selling off nearly all of his stocks and bonds, a total of more than $270 million for 2014 through 2016.

But now he faces loans coming due: $100 million on Trump Tower next year; $125 million on his Doral golf resort in Florida in 2023; and $170 million on the Washington hotel in 2024. Mr. Trump personally guaranteed most of that debt, which means the lenders could pursue his other assets if he cannot pay or refinance.

His prospects grew more dire after the violence at the Capitol, when Deutsche Bank — the last mainstream bank willing to do business with Mr. Trump in recent years and his lender on Doral and the Washington hotel — said it would no longer lend to him.

Phillip Braun, a finance professor at Northwestern University, expects that Mr. Trump will find another lender, but at a price.

“He will be able to find credit if he is willing to pay higher rates,” Mr. Braun said.

The president’s greatest long-term money producer appears to be one of his first projects: the retail and commercial spaces in and around Trump Tower, in Manhattan, which for years reliably delivered more than $20 million a year in profits. But the downturn in brick-and-mortar retail before the pandemic, combined with the economic effects of the virus, have put even that key piece of his financial success in question.

And though Mr. Trump still has assets he could sell to generate cash, he does not have the authority to unilaterally sell what is perhaps the most valuable: a 30 percent stake in two office buildings controlled by Vornado Realty Trust. The investment, which Mr. Trump practically stumbled into and does not manage, has proved to be one of his greatest and most reliable sources of income, but Mr. Trump cannot sell it without Vornado’s consent.

The decade-old I.R.S. audit poses an additional risk. According to records obtained by The Times, it appears to have begun after Mr. Trump claimed that giving up his stake in his casino business for nothing entitled him to a refund of $72.9 million — all the federal income tax he had paid (plus interest) for 2005 through 2008, when his television celebrity exposed him to large income tax bills for the first time in years.

The refund automatically set off an audit, which remained active at least into last spring. Records suggest that the matter was put on hold while he was in office, but it may resume after he leaves. An unfavorable ruling could cost Mr. Trump more than $100 million, with interest and penalties.

Mr. Trump also faces legal threats that could deepen any financial hardship, including investigations into potential tax fraud being pursued by the Manhattan district attorney and the New York attorney general, as well as civil suits for his role in promoting a multilevel marketing scheme.

 

 

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Guest Lobo

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Okay, let's keep this DT-focused.  There is about to be a fascinating deep-dive into everything from tax law, to real estate, to international high finance, to capital stack missteps, etc.  I, for one, am intrigued.  How do you bankrupt the same casino twice?  Considering you're, from a regulatory standpoint, guaranteed a certain gross margin from which you can back out an entire budget?  This isn't a gameshow anymore, lots of Limited Partners have questions, as do creditors, lessors, tenants, landlords, ground lease-holders, equity partners, SPV/JV partners, mezz note holders, convertible bond issuers, bridge lenders, the internal revenue serviced, and a Mr. Ronan Sinatra.  

This is going to make the dismantling of the World Class Capital empire look like child's play.  What happens in the next 36 months will be studied in business schools for a century.  Grab a bottle of water, vodka, and a steak...things are going to get...a little stranger. 

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Guest Lobo

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What about a scale for pillows?  You know, to weigh the pillow after a couple of years of ownership to see if you've sweated/drooled too much into it and it's time to change it out for a new Mypillow.com item?  Would that be anything?  Could we make money on that?  

But seriously, Trump's masterstroke was not having to put up the traditional GP co-invest on many deals.  The "equity" he brought to the private capital stack was his name/reputation.  It worked for awhile.  But for the last couple years before he ran for office, and now for the rest of his grandchildren's lives...the conversation sounds more like this....

LP:  "Well, we're putting up the full 20% equity on this building.  And you still get your GP carry on the back-end?"

Trump Family:  "Yeah, our co-invest is our name and reputation.  Plus our management expertise which of course is the standard 2% fee annually, and although we can't borrow any money anywhere in the world...we'll also collect a placement fee on the debt side for finding term sheets."  

LP:  "So like sweat equity?  For a Manhattan tower?  That's not really a thing."

Trump Family:  "No, not like that...the Trump Brand is the equity."

LP:  "This is our concern dude."  

Edited by Lobo
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bolverk

bolverk 29780

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NY prosecutors interview Michael Cohen about Trump finances

January 15, 2021

NEW YORK (AP) — New York prosecutors conducted an hourslong interview Thursday of Michael Cohen, President Donald Trump’s former personal attorney, asking a range of questions about Trump’s business dealings, according to three people familiar with the meeting.

The interview focused in part on Trump’s relationship with Deutsche Bank, his biggest and longest standing creditor, according to the three people, who weren’t authorized to discuss the investigation and spoke to The Associated Press on the condition of anonymity.

The interview, at least the second of Cohen by the Manhattan district attorney’s office, comes amid a long-running grand jury investigation into Trump’s business dealings. District Attorney Cyrus R. Vance Jr. has been waging a protracted legal battle to get access to the president’s tax records.

The U.S. Supreme Court is expected to rule on Trump’s request for a stay and a further appeal after he leaves office Jan. 20.

The New York investigation is one of several legal entanglements that are likely to intensify as Trump loses power — and any immunity from prosecution he might have as a sitting president — as he departs the White House.

The Manhattan-based grand jury has been continuing its work despite the coronavirus pandemic, which has curtailed many court operations.

The [redacted] president also faces a civil investigation, led by New York Attorney General Letitia James, into whether Trump’s company lied about the value of its assets to get loans or tax benefits. Cohen also is cooperating with that inquiry.

He previously told Congress that Trump often inflated the value of his assets when dealing with lenders or potential business partners, but deflated them when it benefited him for tax purposes.

The White House declined to comment. A message seeking comment was sent to Cohen’s attorney.

Trump has repeatedly called the investigations by Vance and James, both [redacted], a baseless [redacted] “witch hunt.”

Vance has declined to provide specific details about the investigation, but pointed to news reports of what prosecutors described as “extensive and protracted criminal conduct at the Trump Organization” in court filings.

Among the reports Vance’s office referenced in court filings was a 2017 article about Ladder Capital, a commercial mortgage lender that made more than $250 million in loans to the Trump Organization that were secured by Trump properties. Jack Weisselberg, the son of Trump Organization Chief Financial Officer Allen Weisselberg, is a director of Ladder Capital.

Subpoenas issued in the investigation cover 11 entities engaged in business dealings as far away as Europe and Dubai, according to an appeals court judge speaking at a hearing on the matter.

Cohen, who is serving the remainder of a federal prison sentence on home confinement, has been asked by investigators to examine certain Trump Organization documents and to provide other details about its corporate structure, the people familiar with the matter said. Cohen pleaded guilty to evading taxes, lying to Congress and facilitating campaign finance crimes.

Germany-based Deutsche Bank continued to do business with Trump even after he defaulted in 2008 on a loan for his Chicago hotel and condo development. Trump sued the bank and others whom he blamed for his inability to repay.

But Deutsche Bank’s private banking division continued to lend to Trump, including $125 million to finance the purchase and renovation of his Doral golf resort in 2012, according to previous disclosures.

Deutsche Bank declined to comment.

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Guest Lobo

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The only other guy I knew who cheated at golf, hustled real estate scams, lost money in the casino business, and eventually testified against his friends to save his own ass was Allen Glick.  My father met him through his dear friend Jimmy Ditalvo (son-in-law to Sam Giancana---boss of Chicago who helped arrange things in Las Vegas).  You would all know Allen Glick better from the character based on him, Phillip Green...in the motion picture "Casino" played by the great Kevin Pollack.  

After my high school Economics teacher assigned us to read, "The Art of the Deal"...my father told me not to bother with the book...that Trump was a confidence man in the mold of Allen Glick (this was 2 years before "Casino" came out and I had any real idea who Glick was).  As usual, as much as I hate to admit, my father was prescient about people.  Maybe we'll get lucky and Trump's next visit to Iowa will end up in a cornfield like Nikki and his brother.

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Guest Lobo

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Those have about the same taste as Trump does in life choices.  

 

(if you have the occasion, listen to Kyle Kinane's bit about the time he went out for a pack of Doral's and ended up with a scarecrow) 

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TwiceHorn

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2 hours ago, Pato del Muerto said:

What the fuck have you been watching the past 5 years?

Fair, but I think one way Trump has stayed out of a lot of business trouble is by not being publicly traded.  Units in an LP probably aren't publicly traded, but are still subject to disclosure and concomitant fraud lawsuits.

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Guest Lobo

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You still gotta file a PPM in most cases.  There's a stack of 'em somewhere.  He just managed to avoid anybody getting at 'em for a couple decades.  

Attorney General James is not terribly interested in preserving that tradition.  

But seriously, from the way he lures LP's without co-invest and shit carry terms...I'm dying to see how he put all this together.  Politics aside, and y'all can moan as much as you want...this is going to be studied for decades as a cautionary tale.  

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bolverk

bolverk 29780

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11 minutes ago, Incredulity said:

Trump is a piece of crap.

Leftist cunts autoerotically asphyxiating themselves are pieces of crap.

 

clear?

 

4 minutes ago, immortal13 said:

Cloakroomers

Gentlemen, this is a no politics thread. If you're going to delve into that territory, take it to the fucking Cloak Room.

This thread is solely for the purpose of tracking the inevitable saga that will be associated with the financial fallout and associated investigations of the business dealings, potential tax evasion questions, and other alleged malfeasance by the former president and the Trump Organization. We've had similar threads about Theranos, that pharma bro, and many, many others in Bada Bing/Daily Texan for years.

This will be kind of a big deal to follow and see how it all turns out.

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atomheartbevo

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2 hours ago, Hefeweizen said:

 I am morbidly curious.  

There's not a lot of real estate developers in New York (or Chicago), whose fixers publicly declare they are talking to the fed/state prosecutors.

Because that whole fear of ending up in concrete shoes on the bottom of a river or whatever.

I'm more curious in the whole Deutsche Bank thing.

Edited by atomheartbevo
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Incredulity

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5 minutes ago, bolverk said:

 

Gentlemen, this is a no politics thread. If you're going to delve into that territory, take it to the fucking Cloak Room.

This thread is solely for the purpose of tracking the inevitable saga that will be associated with the financial fallout and associated investigations of the business dealings, potential tax evasion questions, and other alleged malfeasance by the former president and the Trump Organization. We've had similar threads about Theranos, that pharma bro, and many, many others in Bada Bing/Daily Texan for years.

This will be kind of a big deal to follow and see how it all turns out.

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Guest Lobo

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I think if he files one more time, he gets a free set of steak knives.  Which will go well with Trump steaks...which was almost his seventh bankruptcy.  

I still can't believe that five of his six were for casinos, one of them...done twice.  

It's literally a baked-in guarantee thanks to regulatory oversight, that you have a certain predictable gross margin.  I'm not saying it's a "can't lose" but it's sure as shit a "Can't bankrupt"  

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VABuckeye

VABuckeye 2472

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2 hours ago, atomheartbevo said:

I'm more curious in the whole Deutsche Bank thing

The big international banks have been fucking things up for a long time. Read about the kid in Malaysia who bilked them out of billions.  This story as it unfolds is going to be a very interesting read. 

The book about the Malaysian is called Billion Dollar Whale.  It will make your head spin. 

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Guest Lobo

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You can't swing a dead cat in New York without running into a family office or institutional investor that hasn't come across a Trump deal.  It's not that hard.  You can't work in private equity for 15 years and NOT meet a single ii/sfo/mfo in New York that the Trump Organization hasn't sucked into a deal.  It's literally impossible.  There are literally dozens and dozens of them from the last 50 years, of whom a handful are groups I know.  If you know anybody that's ever done a private equity deal with New York money, just ask them and they'll also know some folks that invested with Trump.  Nobody is ever gonna do it again, but these people aren't hard to find.  Maybe in your world...

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