Somebody help me out here. The Washington Post reports that in order to avoid posting a $454 million bond in his business fraud case, Donald Trump could file for bankruptcy:
As Donald Trump faces dwindling options to pay off a massive fine imposed as a result of losing a fraud case in New York, financial experts say filing for bankruptcy would provide one clear way out of his financial jam.
....Some of the people in Trump’s orbit think filing for bankruptcy makes financial sense — even if it could be politically problematic. “What is happening to him and his businesses right now is exactly why the bankruptcy code exists,” said one of the people.
I am not a bankruptcy lawyer, but I thought the reason the bankruptcy code existed was to provide a method of orderly liquidation for people who are, um, bankrupt. As in, liabilities greater than their assets and no plausible prospect of that changing.
But Trump is nowhere near that. His net worth is in the billions. The fact that he doesn't feel like selling property to pay a fine is not a justification for bankruptcy, is it? What am I missing here?
In other, completely unrelated news, the Wall Street Journal reports that Trump's Truth Social scam will soon net him a payday of $3.5 billion. Just thought I'd throw that out there.
If he really has $3.5 billion coming in how can he not get a loan?
Because he is legally prevented from using the shares of Truth Social going public as collateral for a loan for six months after the deal closes.
Caveat - if he can get the other two partners to agree, they can start selling shares fairly quickly. But there's a problem - the $3.5 billion assumes the IPO equivalent gets valued at their expected price - which is REALLY high for a company that lost $49 million in the first 9 months of 2023 - $26 million in Q3 alone.
If TFG can convince his two minority partners to go for the money and they manage to dump a LOT of the stack early on, he might make a killing - if they are really fast on the dump.
"His net worth is in the billions. "
Somehow I thought you were too smart to believe that BS, Kevin.
Trump's own claims with regard to net worth (ie, 7-8 billion) are obviously BS. But I've seen numerous, credible estimates pegging his N.W. in the 2-3 billion range. Given the enormous inherited wealth from which he's benefited, this is clearly not a testament to his business "acumen."
"estimates pegging his N.W. in the 2-3 billion range."
His assets are worth billions. The problem is no one knows how much debt he has against those assets. My belief is that his debts are greater than anyone now realizes, and his net worth is in the low millions. I believe that simply because Trump does not act like a billionaire: all the begging; the petty scams and frauds; the constant scheming to make a few dimes here and there. Real billionaires regard such behavior as not worthwhile.
Forbes pegs it at $2.6 billion as of September. And yes, this obviously takes into consideration debt as well as assets. I'm not sure that anyone has a crystal clear picture of his debts, but reasonable estimates can be made based on publicly available information:
https://www.forbes.com/sites/danalexander/article/the-definitive-networth-of-donaldtrump/?sh=7e27b6712a8e
Trump doesn't act like most human beings, rich or poor.
I'm no lawyer, but I'm pretty sure that fraud judgements are not dischargeable through bankruptcy. Any real lawyers care to chip in?
Some are, some aren't. But the real value of bankruptcy for Trump is that it would greatly slow down the process of enforcing the judgment.
This.
It's all about delay, as always. If he can push any embarassment until after the election, he figures he's home free. And if need be he could use a small part of his Truth Social windfall to pay judgments.
There are different kinds of bankruptcy. To obtain a complete discharge of debts would require a Chapter 7, but there is a means test for Chapter 7 and there's no way he'd qualify. Also under Ch. 7 you can only keep your assets that would be exempt from a judgment so he'd still have to get rid of Maralago and Trump Tower. Under a Chapter 13 he could avoid a forced foreclosure but then he'd have to come up with a payment plan to pay his creditors and that would require court approval.
Jesus Christ Kevin. You can’t normally discharge a debt by alleging that you have property you don’t wish to sell but is worth more than the amount you need to pay. Why the fuck are you carrying water for Trump here? You’re just coming across as a standard Republican now… which your whole brand is “conservative centrist or Democrat.” So sure piss all over that brand but don’t be surprised if readers brand you as GOP curious.
👍👍👍👍👍
Did we read the same post? Far from "carrying water" for MAGA, Kevin is suggesting talk of bankruptcy is yet another Trump scam designed to allow the God Emporer to escape justice.
Only persons with impoverished reading comprehension as well as a bizarrely rapid partisan activist distortion lens could jump to any branding of 'GOP curious' or any such thing.
Drum was asking about how Trump could possibly use bankruptcy, not carrying any water.
A fine illustration of how rabid partisanship and poor reading comprehension leads to internecine attacks however.
Yeah - amazing. Jeebus. Thanks Lounsbury
Is there anyone that can explain how Trump could make $3.5 billion from a company that isn't actually worth that much?
At the moment, the stock is thinly traded and it appears that a significant number of MAGAts are willing to pay much more than a sensible price for that stock, just because it's Trump's company. However, even when Trump can sell the stock in another six months, trying to dispose of any substantial part of his stock would most assuredly drive the stock price down, a lot. In other words, Trump has a paper profit of $3.5 billion, but no way to actually realize on it.
WSJ:
Read that again: $5 million in sales in 3 years!
The average McDonalds franchise makes $3.5 million in sales per year.
There is no way in hell that Trump ever sees $3.5 BILLION from Truth Social. It's one thing to have somebody buy a minority share to inflate the company value on paper. It's another thing to get real investors to pay a ridiculous premium for his latest scam.
The Journal says they might do an IPO as soon as next week. Trump wants it to be the next meme stock. But more likely it loses 99% of its value the first week.
The alternative scenario: some Russian oligarch or Saudi prince comes in with a huge payout for Truth Social in exchange for boxes of documents that the FBI never recovered from Mar-a-Lago.
The Trump m.o. for many years now: escape from justice for one crime by committing another crime that's 10x worse.
Read that again: $5 million in sales in 3 years! The average McDonalds franchise makes $3.5 million in sales per year.
lol
After Melon Husk's experience with Xitter, how anyone thinks Truth Shithole would be a money maker is beyond me. I'm sure there are a bunch of finance guys drooling over their fees, but they are going to be the only ones.
I have similar questions involving Bitcoin.
Bankruptcy lawyer here. You do not have to actually be insolvent to file for bankruptcy. Filing bankruptcy after getting a large judgment entered against you for purposes of getting a stay pending appeal rather than posting a bond is a common tactic. (It's what Rudy Giuliani did.)
Regarding dischargeability, that is a very complicated area of law that is very fact-dependent . Do not believe anyone confidently stating anything one way or the other. They do not know.
Ahh, the Alex Jones route:
https://www.reuters.com/world/us/sandy-hook-denier-alex-jones-eyes-late-march-bankruptcy-exit-2024-01-25/
Tom Selleck on line one!
https://www.reddit.com/r/PoliticalMemes/comments/1bjlqf4/hear_me_out_maralago_reverse_mortgage/
LOL.
Meanwhile, aren't Don Jr. and Eric on the hook for millions? What will they do?
$4 million each.
I'd post a link to an opinion in The Washington Post, but having switched from print to app, I can't access the URL (website switches me to the app version). The author indicates that trump wants to avoid bankruptcy because it will destroy his reputation as a savvy businessman, an image obviously derived from his "Apprentice" show.
So few of his supporters seem to have or want any knowledge of his notoriety in NY & his 6 or 8 bankruptcies! Too bad that knowledgeable people aware of his association with not only Roy Cohn but known mobsters, people like Jerry Nadler & John McCain, couldn't educate those individuals before they joined the cult.
Obviously, trump knows that his fans don't know and/or just don't care that he has multiple bankruptcies in his past.
Here's the link. It should open for everyone.
https://wapo.st/4cqzXeL
I really don’t see how filing for bankruptcy harms him politically. He can just portray it as a smart business move and also a way of stymie the forces who are unfairly attacking him. He will count it as a “win” and his supporters will believe him. He thinks he is going to be President next year and if he does all of his legal woes will evaporate.
I'm pretty sure Trump would say his bankruptcy was "perfect" and another example of his business acumen. Yeah, it's that bad a world we are living in.
He would, but the problem would be convincing himself.
I don't know whether it would harm Trump politically. But it would devastate him psychologically. There's a huge difference between having a business you've sucked all of the money out of declare bankruptcy, and declaring personal bankruptcy. The former is playing the game.
The latter is an indication of failure. That's true even if you were forced into bankruptcy by a court judgment. Maybe even more so. Declaring bankruptcy would mean that Letitia James beat him.
That is a line of defense he used during the 2016 Republican debates. Those were company bankruptcies and not him.
I guarantee you that the Democrats will play that clip of him saying that if he were to try it. Sad!
Politically, he might even make bankruptcy work in his favor. It's his ego that can't take it. He wants everyone to believe he's rich.
I really don’t see how filing for bankruptcy harms him politically.
It probably won't harm him very much. But if you're Trump, why leave anything to chance? It's negative news about the Trump brand one way or another, and in a close election (which it very likely will be) who know what the deciding factor(s) will be?
He will count it as a “win” and his supporters will believe him.
None of this is about his MAGA supporters, but about the very modest number of "up for grabs" voters in seven or eight states.
Thing is, TFG has never said or done anything that could appeal to those ‘up for grabs’ voters, or the ‘iffy’ voters that lean Republican. He may actually believe that he really has a majority, or he may be just so addicted to cheering MAGA crowds that he always opts for his proven applause lines. Either way, he’s high on his own supply.
This is all speculative, since many of the details of Trump’s financial dealings are not publicly known, but he may face at least a couple of obstacles to raising the cash, even if he is worth “billions.” First, some portion of those assets may be encumbered, which would limit his ability to sell them. Second, if his assets are encumbered, filing bankruptcy might constitute an event of default on one or more of any loan agreements he may have, and one or more of those loan agreements may be cross-collateralized, so that a default on one of them could constitute a default on other agreements, which could possibly lead to a broad financial collapse. Again, this is speculative, but these arrangements are common in commercial financing.
"I thought the reason the bankruptcy code existed was to provide a method of orderly liquidation . . ."
I think bankruptcy is also, and ritterjcat can tell me whether this is roughly right or not, for stopping the clock to reorganize assets and renegotiate payments when people or entities can't keep up with cash flow. That seems to be closer to where trump's butt is clamped right now.
A minority opinion, but I don't think the image thing would be all that terrible for him with his peeps because he can sell it to them the way he sold tax cheating in the Hillary debate, as in "it makes me smart." It probably wouldn't help him with marginally-attached or trump-curious, as opposed to the devoted ones, but he doesn't seem to care much about them anyway.
But it would mean even more people and courts crawling through his business books and sticking their noses into all corners of his financial life, more than even this NY judgment has done, with the potential for more people to slip info to the press (hey, Pecker might be willing to pay big bucks for the story!), and that strikes me as something he'd want to resist to the last ditch.
He might be more inclined to do it if he could limit proceedings to a few of the 500 or so LLCs in his operation, but how likely could that be when the judgment against him is (I think) personal? Ultimately I have to think some nefarious knight in soiled armor would come to his rescue before he got that desperate. Which would sharpen the basic question with him-- it's not what he owns that matters, but who owns him.
I think it's also a way to keep the bankrupt party from paying off obligations to close allies while stiffing everyone else.
EDIT: Or should I say "obligations" with irony quotes added?
Some of his other options:
- Sell his stake in some properties/ventures.
- Sell his business to his children, who then take up the slack of providing the capital daddy needs.
- Reach out to a Sugar Daddy whose last name rhymes with Tusk.
- Call Putin.
- Call Xi.
- Sell his soul twice-over, to the Devil.
- Delay until after he presumably wins the electoral college vote, then pushes the issue of any enforcement, civil or legal, to SCOTUS where a majority will hold a reading that the supremacy clause applies to states, therefore, if DoJ says it cannot enforce actions against POTUS while s/he is in office, neither can states.
- All of the above.
Sure he can. It’s called a reorganization. It allows for an orderly distribution of assets. It’s the only thing he can do, if he can’t get an ILOC.
It'll trigger a hard pause (a stay) on the judgement enforcement.
However, it won't get wiped out by the bankruptcy because it's not dischargeable.
Hold on. I, for one, do not believe that Trump is unable to post the bond in question. I think he can, he just doesn't want to. He wants to fundraise off of it. He is fundraising off of it. He wants to see what other concessions he can get from a posture of "I can't pay that". Come the due date, he will show up with the bond.
If this were real, he would be a candidate for Chapter 11 bankruptcy (there are two types of bankruptcy, did you know that?). Chapter 11 is meant to deal with the situation of bad cash flow, but good assets. Chapter 7 is the full liquidation option. There's no reason to do that, nor would a court likely approve it since what will happen without the bond is a liquidation.