With the presidential elections a mere year and a half away it seems likely that Donald Trump will try and test the waters and seek the Republican Party’s nomination during the primaries. He’s been all over Fox News the past week or so and he seems to have fallen in with the so called birthers who question whether Barack Obama is even eligible to be the POTUS because of their claim that he wasn’t born in the United States.
He’s been embraced by the likes of Rush Limbaugh, Sean Hannity and Glenn Beck as sign of American “exceptionalism” and a role model for capitalism as we know it.
Here’s what I don’t get.
Besides the whole “birther” nonsense which was put to rest back in 2008 does anybody remember that Mr. Trump has filed for bankruptcy on at least three different occasions?
The first time was way back in 1991 when he found himself in the unfortunate situation of being unable to repay a business loan to the tune of 3.5 billion dollars. His banks and bondholders lost millions on the deal and stood to lose even more when they arrived at a compromise. They wound up giving him lower a lower interest rate and more time to repay the debt. In return, Mr. Trump gave his investors half the ownership of the Taj Mahal casino.
One might think that the trauma of going through bankruptcy proceedings would make one more cautious in future business dealings but in the case of Mr. Trump one would be wrong.
Less than a year later the Trump Plaza Hotel closed its doors and Mr. Trump was forced to go to the courts again. He worked out a similar deal where he ceded 49% of the hotel to Citibank and some of his other lenders. In return, he bought some time to repay the principal. Two years later his debt was paid off and he was back in business.
It took awhile but in 2004 Mr. Trump once again had to seek court protection from his creditors. This time it was for Trump & Casino Resorts. He wound up restructuring the company’s debt, reduced his ownership from 56% to 27%, wound up giving his bondholders stock to reduce his payments and resigned as CEO of the company. In 2005 the company remerged as Trump Entertainment Resort Holdings.
Too bad it didn’t last.
In February of 2009 on behalf of Trump Entertainment Resort Holdings he filed for Chapter 11 bankruptcy citing a debt ratio of approximately $50 million dollars in assets against $500 million dollars in debt.
I’m sure many of us were touched by the whole sub prime mortgage and financial crisis of 2008 and Mr. Trump was no exception. It seems that sales at the Trump International Hotel and Tower were plummeting and he was in the pockets of Deutsche Bank to the tune of $40 million which he failed to repay.
He went to court and in some creative lawyering argued that the crisis itself was an Act of God and he didn’t have to repay the bank. (I’m sure the thousands upon thousands of home owners who were foreclosed on would like to argue the same thing.) He even went to far as to claim he had been slandered and initiated a countersuit against Deutsche Bank.
For what its worth, Deutsche Bank noted to the court that “Mr. Trump is no stranger to overdue debt” and cited his previous bankruptcy filings as evidence.
So, is “The Donald” sincere in his bid for the Presidency or is this just another way to keep his name in the headlines?
Only time will tell.
As an aside and maybe as a tweak to President Obama Mr. Trump recently posted a copy of his birth certificate on the internet for the whole world to see. Unfortunately, the copy that he provided was a ceremonial one issued by the hospital and did not contain the seal of the New York State Department of Health or the signature of the city registrar.
What say you Mr. Trump?