No van. No Gubmint cheese. Gaol is going to look like the soft option.
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Except, as we know from when he was president, most likely. he’s still running things, but through those doofuses…
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He might have to break Eric up for parts - or maybe he’ll convince himself he can sell off Greenland to the Danes.
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Thanks for that clear explanation. Truly excellent.
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Loans are to a person or organization. The person or organization repays the loan, not the asset. Just because a particular asset was presented as collateral doesn’t mean the lender has dibs on it. Until and unless they consider the loan overdue and go through the default process against it, the lender has no claim on an asset used as collateral.
The only way lenders have dibs on his buildings is if the building is a stand-alone company and the loan was to that company. Even then, I think they’d have a problem collecting unless the loan was already in default.
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It’s pretty rare, though, that there isn’t a stand-alone LLC that holds each property. This is the org chart for the Old Post Office building in DC. There are some tax efficiencies for this, but importantly its for bankruptcy-remoteness. That is, of the Old Post Office building falls down and kills a bunch of people, the only pile of money to go after is the value of that entity, not the Trump Org as a whole. The loans against the building will be taken out by that entity as well.
It’s certainly possible that Trump has had to guarantee loans beyond the value of the property, but those rights would still (very likely) be subordinated to the lenders.
Tax liens are a different animal. I used to work on project financing of power plants, which isn’t too different, and generally there’s a cash-flow waterfall attached to a property like this. Revenue goes into a bucket and things get paid out of that bucket in a very specific order. Taxes were at the absolute top of that list, even before principal and interest to the lenders, so it’s unlikely any of these buildings have a tax problem because of Trump’s general grift and incompetence.
(Below is the org chart just for the post-office property – if you ever heard Donnie Jr or Eric bragging on how the Trump Organization is “hundreds of companies” – it’s because of stuff like this. He’s got 40-50 properties around the world, and they all have layers of this stuff in it. It’s necessary to do these deals competently, but it’s like saying, “My house is so fancy it has many walls, both inside and out!” – true, but entirely irrelevant).
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That makes sense. Would the loan have to be in default for the lender to have first claim on it? If so, it was never really Donnie’s asset in any meaningful way, no?
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In general lenders (and borrowers too) want to avoid bankruptcies because you lose both time and control over how these deals collapse (it’s sort of like hitting the hyperspace button in Asteroids – you may have no choice and while you might be out of a bad situation, but you might end up in a worse one!). In an actual bankruptcy you have a lot of work to do to figure out where the various priorties are – and that can get complicated (and expensive) – but as a first approximation, the lenders interest dominates the whole equation.
As for ownership, I don’t want to be seen as defending Trump in any way at all, but it’s not really different than any other real estate development/investment – highly leveraged deals – Trump’s general business ickiness isn’t that he leverages his deals, but that he then spends all of his time trying to get out of contracted-to obligations.
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I guess my point isn’t so much the legal status of the buildings but the idea that they were ever “his” to begin with if they were leveraged developments that were secured with loans that weren’t paid off and held by shell corps. If you don’t have a right to sell it, it was never yours…
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“My house has the best walls, really beautiful walls like you wouldn’t believe, folks, many people are saying it’s the greatest house, it has so many walls, both inside and out…”
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Idle curiosity: Does Trump treat his accountants much better than he treats his contractors?
It seems that he’d have to, although he also treats his lawyers badly as we have seen.
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“My walls are so great we include their square footage in addition to the floor. Have we mentioned the ceilings yet?”
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Ask Allen Weisselberg…
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Probably Trump is hoping he gets elected President, so he can pardon himself for any criminal offences and order the Treasury to print up a billion $ to pay off his loans and fines.
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As a huge Asteroids player back in the day, I appreciate your cunning use of the simile in this situation.
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