Posted on 01/29/2016 10:53:18 AM PST by Kaslin
I'm sick of hearing media 'experts,' political pundits and citizens bash business people for things that are perfectly moral, ethical and legal because they have no acumen or experience in any of the subject matter. They've never paid a payroll, run a business, or dealt first-hand with operating a business. They are simply spewing useless garbage out of their mouth, as a result of their abject ignorance.
I've had hundreds of Tweets and Facebook comments bashing Donald Trump for his four business bankruptcies. This bothers me; not because I want people to support Mr. Trump, but because it reveals a level of stupidity and ignorance that is scary.
Donald Trump's first business bankruptcy was The Trump Taj Mahal in 1991. He gave up $1 billion in personal investments and half of his equity in the business to satisfy his personal guarantees. After all of his personal guarantees were paid back to the bank, the casino company went through Chapter 11 Bankruptcy and emerged. What would Trump bashers have preferred he do? Wipe out everything he owns, pay off all the debt, fire everyone and close the casino down? That's foolish. But, if you bash Trump for this bankruptcy that is exactly what you are suggesting. On the debate stage, Trump has said this about his use of bankruptcy code for his casinos: "I'm in business. I did a very good job."
Trump again invested millions of his dollars to acquire Trump Plaza Hotel in 1992. Again, it entered financial trouble and he gave up a substantial portion (big losses for him) of his investment and complied with the banks' demands to cede control to another party.
Trump Hotels and Casinos Resorts in 2004, which was majority-owned by people other than Trump, filed for chapter 11 bankruptcy. His stake was cut nearly in half. At the time, he told the Associated Press that the company represented less than one percent of his net worth.
Trump Entertainment Resorts in 2009 was the fourth infamous Trump bankruptcy. He lost the majority of his investment resulting in less than a 10 percent stake in the emerging business.
Each of these cases have a common theme. Donald Trump used his name to brand property investments with a host of other investors and managers. He invested over $1 billion in these properties which he later surrendered to banks to cover personal guarantees and satisfy the banks terms. Chapter 11 bankruptcy is a reorganization process. This form of bankruptcy is commonly used in business to allow an orderly and fair process to pay creditors and keep the business open. In many cases, the banking institutions behind the troubled debt prefer businesses to follow this route as it is managed by a federal court and provides certain tax benefits to all parties. This process is anything but running away from your debts.
An example of business bankruptcies is found in the airline industry. If you're foolish enough to bash Trump for keeping the businesses open through reorganization bankruptcy, perhaps you're just confused. Let me explain how. Remember when Aloha Airlines filed Chapter 7 bankruptcy in 2008, ceasing operations, leaving passengers stranded and many 'out in the cold' with tickets they had already purchased? Chapter 7 is what happens when the business is liquidated and closed, most unsecured debts don't get paid and the secured-lenders get pennies on the dollar, if anything. Maybe you thought Trump did that?
By contrast, Delta, United and American Airlines have all filed chapter 11 bankruptcy in the past 15 years. All three are now impressively profitable and employee a total of 246,000 people. So if you think we should judge any executive who took those three airlines through rough market turmoil and reorganization, which ultimately saved them from liquidation (chapter 7) bankruptcy, then you are foolish.
A corporation is a separate and legal entity. It may bare the name of a person, but it is not the person. Business people set up corporations to protect their family from unexpected market turmoil such as experienced in the Financial Crisis of 2009. Trump's casino adventures were ultimately just property investments; not his company. Let me explain.
Prior to selling it, I operated a corporation in which I held 100% of the equity. Inside that corporation, it operated several limited liability companies (LLC). Some had my personal brand name. Some did not. My corporation (which was 100% owned by me) would own a percentage of each of these new companies with partners.
Our one mistake with these companies? We had personal guarantees on some of the debt. Had I not allowed banks to manipulate us into those personal guarantees, those entities could have survived through Chapter 11 restructuring. Instead, we closed or consolidated those affected LLC's to protect the personal guarantors from further liability.
The point here is that Trump quickly learned to keep the personal guarantees away from the businesses so he wouldn't be forced to conflate his personal interests with that of his partnerships. Keeping them separate helped the businesses continue.
Aside from my personal home, I'll never sign a personal guarantee on my businesses again. The business can use it's own balance sheet and profit-and-loss statement to secure financing. Ultimately, my businesses are investments. I'll invest my cash into the business, which puts it at risk, but I will not put my families' assets on the line outside my initial investment. If you think there is something wrong with that, you're foolish. If you haven't done it, don't bash those who have.
Banks don't play fair. When they have all the leverage, they will take all or more than they are owed at the absolute worst time.
Trump has learned that lesson. He's not foolish. Bash him for the reorganization of companies, baring his name through chapter 11 bankruptcy, you're the fool.
Don't wish to vote for him for any other legitimate reason? That makes you an American.
... to continue the thought, in contemporary times we constantly seem to complain about a lack of good choices. Good choices come from the hard work of exceptional leaders. Exceptional leaders are risk takers. The trend in contemporary society is to be increasingly risk-averse. This risk aversion is enforced by small armies of bank accountants and bank lawyers. Therefore the efforts of society through accountants and lawyers counteract the type of leaders we seem to desire. In the long run, we deserve the leaders we get. We cannot have a risk averse society and make forward progress. Banks express society’s aversion to risk via their loan policies to businesses.
Bullcrap. "Business" such as you describe induces policing, courts, and lawyers, a huge overhead, much of it at public expense. Even bankruptcies have to be covered by the public to some degree in the form of higher interest rates to cover the bank's cash flow.
If Trump was a crook with all the people like you out there and all the lefty Manhattan DA's and US Atty's he'd have been in jail a long time ago.
Let's try a little thought experiment there.
If Hillary was a crook with all the people like you out there and all the lefty Manhattan DA's and US Atty's she'd have been in jail a long time ago.
Obviously not. When the crooks are part of the "lefty" system, like Trump has been, they don't go to jail unless they sting a bigger leftist crook.
Are you planning to carry your hatred beyond the primaries and into the general election? What if Trump is the next president? Will you hate him then, too?
You bet. He's a lying con artist. You will learn to hate him too, but by then it will be too late. You could always try doing your homework instead? The media won't do it for you. He's their boy.
Homework? I don’t need no steenkin’ homework.
Washington DC is a china shop in need of a bull.
Trump is that bull. All the others, save Cruz, are
too weak-kneed to do what needs doing.
Homework? I don’t need no steenkin’ homework.
Washington DC is a china shop in need of a bull.
Trump is that bull. All the others, save Cruz, are
too weak-kneed to do what needs doing.
All the casinos took a hit after they started opening indian casinos everywhere. He has some of the best NYC and international real estate. he overcame the bankruptcies to become a billionaire. He will whip this country back into shape. He’s tireless and unlike hussein he will roll up his sleeves and get to work. Will probably even bring back the traditions of family Christmas in the White House.
Business is the art of making irrevocable decisions
based on insufficient information. It’s not for sissies.
Thank you for establishing your ignorance. Trump is a charter member of the cheap labor express, and has a court judgment against him as an abusive employer of illegal aliens.
But you knew that already, right?
Thanks, Kaslin.
I don’t care if Trump ...
... has a limo powered by illegal alien sweat.
... wears underwear made by Latvian orphans.
... has an aide to tell him what time it is.
He’s what this country needs, and he’s got my vote
just as assuredly as he has your hatred.
In the end, you're measured not by how much you undertake
but by what you finally accomplish.Donald Trump
click the pic
donate to the most conservative online site!
Oh, you mean this country needs 11 million more Democrats?
Thanks for coming out.
Now you’re just ranting.
Have a great day.
The genius who believes he has mastered the art of the deal was told by many people before his bizarre investment in the Taj Mahal that the numbers simply could not work. Trump's megalomania and narcissism is so extreme that he simply would not listen to reason. He was the subject of an analyst's report which predicted bankruptcy for the Taj Mahal. Typically, Trump sued the analyst, caused him to be fired from his position, and then witnessed the Taj Mahal go bankrupt within months.
Donald Trump is not unqualified just for his bankruptcies and appalling business judgment alone but for his cruelty. His treatment of his tenants to evict them from his properties to in order to convert those properties was clearly cruel, and unlawful.
Donald Trump is not unqualified just for his bankruptcies or for his cruelty but for his associations with mafioso, convicted criminals, corrupt union officials, corrupt politicians, and even Democrats who have not yet been proved to be corrupt.
Donald Trump is not unqualified just for his bankruptcies or for his cruelty or for his associations alone but for his deceits. His outright misrepresentations concerning the quality of his buildings to tenants who have been misled and cheated with shoddy quality are notorious.
him him him him Donald Trump is not unqualified for his bankruptcies or his cruelty or his associations or his deceits alone but for his bullying of vulnerable people such as those he sought to deprive of their property by exploiting condemnation laws.
Donald Trump is not unqualified for his bankruptcies or his cruelty, or his associations, or his deceits, or his bullying alone, but for his boorishness, his grotesqueries, his endless puerile sexual innuendos.
Donald Trump as a human being is thoroughly unqualified for any position of power where ego, narcissism or greed might take the place of decency.
No, I'm not. Trump has promised to legalize the bulk of illegals "rapidly." He has also advocated citizenship for them. He's a charter member of the cheap labor express.
How do the police get involved in a Chapter 11? It would have to be a small bank to have to up interest rates on one loan. Public expense? How? Does the whole public become involved? People who bank there yes but everyone??? I doubt that. Courts are set up for this. It is legal and normal to have happen. Henry Ford went bankrupt twice before he finally figured out to stop making racing cars and build something people would buy.
Great post.
No doubt it will generate a Great deal of the Great replies.
Enforcement.
It would have to be a small bank to have to up interest rates on one loan.
Depends upon the scale.
Public expense? How? Does the whole public become involved? People who bank there yes but everyone??? I doubt that.
Oh really? The S&L debacle escapes your recall? How about the 2007 bailout? Sarbanes Oxley "too big to fail"?
Good grief.
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