October 4, 2016

DADDY'S BOY:

Donald Trump's Business Decisions in '80s Nearly Led Him to Ruin (RUSS BUETTNER and CHARLES V. BAGLI, OCT. 3, 2016, NY Times)

For a single businessman to declare losses approaching $1 billion is so extraordinary that it caused several accountants and lawyers consulted by The Times to blanch. The precise breakdown of that figure -- specifically which Trump enterprises were responsible for how much -- remains murky, hidden in a schedule attached to Mr. Trump's returns that has not become public. But a review of public records and interviews with those who were present makes clear that it was decisions Mr. Trump made at the helm of his business empire during the 1980s that led to its nearly imploding.

Mr. Trump, the Republican nominee for president, portrays himself now as a self-made man who began life with what he has characterized as a meager $1 million advance from his father. That figure itself represents a significant understatement about the support his father provided him over the years. But in his darkest moment, Mr. Trump again leaned on his family's wealth, this time to ride out a financial tsunami. [...]

He promised to make up for a cash shortfall with the sale of condominium units in Trump Tower in Manhattan. When that did not generate enough money, he filled the hole in his balance sheet with the "unforecasted receipt of funds from certain family-owned properties in New York City" -- apparently referring to fees from properties his father, Fred C. Trump, had built outside Manhattan.

At the end of 1990, when Mr. Trump was facing an $18.4 million interest payment, his father sent a lawyer to the Castle ca[**]no to buy $3.3 million in chips and leave without cashing them, providing his son with an infusion of cash.

 
By 1993, Mr. Trump was still in dire straits. He dispatched a company executive to ask his siblings if he could borrow $10 million from their respective shares of the family trust. Mr. Trump received the loan, according to people who were involved and spoke on the condition of anonymity to avoid angering him, and went back for another $20 million the following year. Mr. Trump has denied borrowing from his siblings.

Mr. Trump had negotiated reduced interest rates on some of his loans, partially by agreeing to give up money-losing enterprises, including his airline, his yacht and a stake in the Plaza Hotel in Manhattan. His lenders forced him to live for a time on $450,000 a month.

WARNING : Do not try this at home.
Posted by at October 4, 2016 1:36 PM

  

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