How Donald Made a Fortune by Dumping His Debt on Other People

[RavenSky]

I think we should probably merge several threads - including this one - into a megathread called "Donald's Dirty Dealings"

Another investigative report from Mother Jone's:

...three casinos he still controlled—the Taj Mahal, the Trump Plaza, and the Trump Castle—were still deeply in debt.

So Trump figured out a way to erase that debt—at least for himself. He created Trump Hotels and Casino Resorts, a publicly traded company that operated the Trump Plaza. For about six months, it was a success. The company's stock shot up from $14 to $35 a share, putting Trump back on the Forbes list of America's 400 wealthiest people and helping him pay down $88 million of his personal debt...

Then Trump sprung the trap. He used the company to buy the Taj Mahal and the Trump Castle, effectively purchasing the casinos from himself at a price that he set. "The company bought his Castle for $100 million more than analysts said it was worth," the Post reported in June. "Trump pocketed $880,000 in cash after arranging the deal." The two properties were also $1.7 billion in debt, and that debt suddenly belonged to Trump Hotels instead of Trump himself.

By the end of 1996, Trump Hotels stock was worth just $12. It eventually crashed down to 17 cents a share.

But even as its value collapsed over the years, the company paid Trump a total of $82 million by Fortune's estimate, covered the cost of entertaining his VIP guests, signed contracts to buy other Trump products, and even employed then-26-year-old Ivanka Trump on its board.

...despite making a killing while leaving his shareholders in the lurch, he doesn't have any regrets. "All I can say is I wasn't representing the country," he told the Post. "I wasn't representing the banks. I wasn't representing anybody but myself."

http://www.motherjones.com/politics...ald-dumped-his-huge-casino-debts-other-people

 

[scombrid]

It is amazing to me how many times he has been able to totally shit all over his creditors and then turn around and then convince another batch of dupes to loan money to him.

His model now for decades has been to attract a bunch of loans for grandiose projects, have the projects fail, keep his cut, stiff his creditors, walk away, lay low for a spell, go get some big publicity to hype his name, repeat the loan getting process...

It he were subject to normal credit rating then nobody would ever loan him money. However, he manages to glamour up his "brand" and then go find another set of marks to swindle.

 

[scombrid]

Then Trump sprung the trap. He used the company to buy the Taj Mahal and the Trump Castle, effectively purchasing the casinos from himself at a price that he set. "The company bought his Castle for $100 million more than analysts said it was worth," the Post reported in June. "Trump pocketed $880,000 in cash after arranging the deal." The two properties were also $1.7 billion in debt, and that debt suddenly belonged to Trump Hotels instead of Trump himself.

By the end of 1996, Trump Hotels stock was worth just $12. It eventually crashed down to 17 cents a share.

Way back in April I was having beers with a bunch of friends and one friend started singing praises for Trump. My friend was talking about how much money he personally made on Trump Hotels and Casino Resorts stock. He had bought when Trump first went public and sold that stock while the price was still high. My friend thought that was evidence of Trump's business skill. I tried to argue with him that Trump grifted that deal and basically scammed everybody that bought shares. My friend didn't see it that way. He said that buying any stock is a risk and that it was a legitimate investment; tough shit for the people that didn't get out early enough.

 

[Tom Sawyer]

Hey, that's just smart business. If he hadn't sold the stocks, Trump would have just squandered his money.

 

[Playball40]

But if he went public, wouldn't he have to disclose the state of the assets (debts)? Why would people invest in such a heavily leveraged venture (especially if there was not the cash flow to support it)? And honestly, what he did and does is really NO different than Bain Capital.

It's maddening what is happening to iHeart right now because of this kind of set up. Leveraged at the corporate level so the "managers" (Bain) could take their huge amounts off the top.

 

[RavenSky]

But if he went public, wouldn't he have to disclose the state of the assets (debts)? Why would people invest in such a heavily leveraged venture (especially if there was not the cash flow to support it)?

It sounds like he took it public when the corporation only owned the profitable hotels, and then after the stock prices soared because people were buying in to a stable, not over-leverage corporation, he had the corporation buy his failing casinos. Then he sold his stock.

So he made a bundle of money on the sale of his failing casinos, and made a bundle of money selling his stock with the insider knowledge that the corporation was now saddled with debt.

I don't know what the laws are, but that should be a crime worthy of prison. Martha Stewart went to prison for one hell of a lot less, and her action didn't even hurt anyone else.

And honestly, what he did and does is really NO different than Bain Capital..

Worse, in my opinion.

 

[Jimmy Higgins]

But if he went public, wouldn't he have to disclose the state of the assets (debts)? Why would people invest in such a heavily leveraged venture (especially if there was not the cash flow to support it)? And honestly, what he did and does is really NO different than Bain Capital.

Trump created a company to fraudulently off load debt and had the steel balls to get paid a good deal in the process.

 

[hurtinbuckaroo]

Is it possible at this point that Trump has to win in order to stay out of prison?

 

[Jimmy Higgins]

Is it possible at this point that Trump has to win in order to stay out of prison?

I've been reading that people are thinking that. Believe me!

 

[Elixir]

Is it possible at this point that Trump has to win in order to stay out of prison?

I've been reading that people are thinking that. Believe me!

If he loses the election, there will be armies of scumbags of his own ilk out for blood, if for no other reason than to create an appearance of their dissociation with Trump. He will have his hands full for years trying to stay out of prison, "TRUST ME".

 

[Playball40]

How is it legal for him to sell stock with that information? I thought there were black out requirements.

It sounds like he took it public when the corporation only owned the profitable hotels, and then after the stock prices soared because people were buying in to a stable, not over-leverage corporation, he had the corporation buy his failing casinos. Then he sold his stock.

So he made a bundle of money on the sale of his failing casinos, and made a bundle of money selling his stock with the insider knowledge that the corporation was now saddled with debt.

I don't know what the laws are, but that should be a crime worthy of prison. Martha Stewart went to prison for one hell of a lot less, and her action didn't even hurt anyone else.

And honestly, what he did and does is really NO different than Bain Capital..

Worse, in my opinion.

 

[Shadowy Man]

And why is only now with six weeks to go that all these past events are finally coming out. Had the other Republicans been able to beat upon him with all of this, do you think he'd have made it this far?

 

[Elixir]

And why is only now with six weeks to go that all these past events are finally coming out. Had the other Republicans been able to beat upon him with all of this, do you think he'd have made it this far?

Out of 16 republican candidates, 15 had skeletons in their closets and didn't want to go there. So they let a guy living in a mansion full of skeletons beat the crap out of them.

 

[Shadowy Man]

And why is only now with six weeks to go that all these past events are finally coming out. Had the other Republicans been able to beat upon him with all of this, do you think he'd have made it this far?

Out of 16 republican candidates, 15 had skeletons in their closets and didn't want to go there. So they let a guy living in a mansion full of skeletons beat the crap out of them.

And Trump's skeletons aren't even in the closet! They're hanging out on the doorstep!

 

[RavenSky]

Out of 16 republican candidates, 15 had skeletons in their closets and didn't want to go there. So they let a guy living in a mansion full of skeletons beat the crap out of them.

And Trump's skeletons aren't even in the closet! They're hanging out on the doorstep!

Both of those, but I think a large part of it was also that none of them thought he would actually win the nomination. I think they each were counting on Trump eliminating the other 14 without they themselves getting dirty, and then the last man standing would easily win against Trump because... well... Trump. They (and the media) miscalculated.

 

[ZiprHead]

https://twitter.com/KatyTurNBC/status/782988522588213248
NY AG sends Cease and Desist to Trump Foundation for operating without proper certification.

 

[Tom Sawyer]

https://twitter.com/KatyTurNBC/status/782988522588213248
NY AG sends Cease and Desist to Trump Foundation for operating without proper certification.

I think it's safe to say that this will be the straw that breaks the camel's back and finally has Trump's base of support abandon him. If there's one thing that disenfranchised, angry racists hate more than Mexicans stealing their jobs, it's people who try to operate organizations without filling out the requisite governmental paperwork first.

 

[Jimmy Higgins]

I've been reading that people are thinking that. Believe me!

If he loses the election, there will be armies of scumbags of his own ilk out for blood, if for no other reason than to create an appearance of their dissociation with Trump. He will have his hands full for years trying to stay out of prison, "TRUST ME".

Not to head off-topic, but the polling is potentially indicating a blow out without the polling directly saying it is a blow out (large third party and undecided numbers making up their minds like in Canada last year). And then we'll have Trump supporters in arms over Clinton stealing an election that the polls (which they claimed were inaccurate already) said would be close.

- - - Updated - - -

https://twitter.com/KatyTurNBC/status/782988522588213248
NY AG sends Cease and Desist to Trump Foundation for operating without proper certification.

Interesting how they didn't file paperwork to be a charity. Makes you wonder if they even are? Anyone check to see if the Trump Foundation is incorporated?

 

[RavenSky]

https://twitter.com/KatyTurNBC/status/782988522588213248
NY AG sends Cease and Desist to Trump Foundation for operating without proper certification.

I think it's safe to say that this will be the straw that breaks the camel's back and finally has Trump's base of support abandon him. If there's one thing that disenfranchised, angry racists hate more than Mexicans stealing their jobs, it's people who try to operate organizations without filling out the requisite governmental paperwork first.

:snort:

 

[Tom Sawyer]

Interesting how they didn't file paperwork to be a charity. Makes you wonder if they even are? Anyone check to see if the Trump Foundation is incorporated?

Well, that would get him off the hook in the Florida thing where he used his charity to pay off business fines. If it's not a charity and simply another branch of the Trump organization, then that's not really a problem. When people make charitable donations to it, is there any language which specifies that those donations will be used for charitable purposes or is the language ambiguous and the charitable uses of the donations are just kind of assumed?