Trump, Lies, and Bankruptcy

National Review ^ | February 16, 2016 | KEVIN D. WILLIAMSON

[reaganaut1]

A pattern emerges.

Donald Trump is a habitual liar, and the thing about habitual liars is that they lie habitually.

In a testy exchange with former Florida governor Jeb Bush, Trump insisted that he’d never gone bankrupt, and that claims to the contrary are a lie. That’s the Trump magic right there: Lying about your business history is one thing, lying that your critics are lying about it is another.

Trump has a peculiar way of speaking about bankruptcy: He has a deep aversion to the word itself. He speaks of “putting a company into a chapter” without ever answering the implicit question: “Chapter of what? Moby-Dick?” The answer, of course, is the U.S. Bankruptcy Code, to which Trump has taken recourse at least four times over the course of his business career. The chapter in question is the famous Chapter 11, which applies to business bankruptcies. Trump proudly insists that he never has had recourse to Chapter 13, the personal bankruptcy code. This is his apparent justification for saying that he’s never been bankrupt. But of course one of the purposes of Chapter 11 bankruptcy is to keep men such as Donald Trump out of Chapter 13 bankruptcy.

Trump’s first bankruptcy was in 1991 after he borrowed a stupidly irresponsible amount of money to finance that monument to excruciatingly bad taste known as the Trump Taj Mahal in Atlantic City. Trump is such a good manager that the casino’s slot machines began failing during its first week of business. Never one to let reality stand in the way of his confidence, Trump had financed the $1 billion project largely with junk bonds, which meant very high interest payments. Trump did not make enough money to meet his interest payment and so was forced into bankruptcy.

[SeaHawkFan]

Trump’s record with suing others is not very good. Those Trump sues or is sued by have a great record. Trump recently had to pay almost $800,000 to a womans attorney that Trump claimed defamed her.

[stephenjohnbanker]

“NR, Cruz and all establishment pushing and shoving to maintain their place at the DC Trough.”

Correct, that’s all it is.

[Titus-Maximus]

I am amazed this has not come up and exploded in his face.

Maybe the Howard Stern interviews.

[KansasGirl]

If you’re voting for Trump because you think he’s a straight shooter, you’re a bigger sucker than those chumps losing money on both sides of the table in Atlantic City.

[wildbill]

Saying Trump borrowed more money than he could pay off probably means he manipulated the numbers via phonybaloney appraisals to show the value of the business or buildings as being worth more than they actually were. Lots of real estate moguls use appraisers who will give them valuations in excess of the real value.

If, as a General/Managiong Partner, you bring other investors into your “deal” and you have invalid appraisals, it used to be called fraud.

The beautiful thing of being the Managing Partner, is that you may not have to put much money in yourself, you get the skim off the top, including money from all the subsidiaries like your construction company and THEN, If your ‘deal’ doesn’t work out, you can declare corporate bankruptcy and walk away, leaving the unwary investors holding the bag and losing their money.

[KansasGirl]

Response #3: Trump's going to make America great again! With his record it’'ll be on promissory notes, bail-outs, and bankruptcy deals.

No wonder a Trump supported TARP and the auto bailouts. And Obama's stimulus boondoggle. I wonder what favors Trump will do for the Saudi prince who bailed him out.

[r_barton]

He recently sued Univision for not carrying Miss America after they signed a contract to do so. Trump sued for $500-million and there was an undisclosed settlement.

The Univision settlement probably paid for his Presidential campaign.

Trump, Univision settle beauty pageant lawsuit
http://www.usatoday.com/story/money/2016/02/11/trump-univision-settle-beauty-pageant-lawsuit/80238188/

[JhawkAtty]

We’re not electing a pastor or a debater. This is a race for the chief executive. Snarky lawyers need not apply.

[Thibodeaux]

is not envy a mortal sin

[reviled downesdad]

The point is not the bankruptcies. Everybody gets knocked down and most understand that.

The point is DT’s insistent and flippant reaction to call people liars when they point to those bankruptcies as examples of where DT was not the winner and actually had many failed business ventures.

Such would fly in the face of his rhetoric that he is the winner and everything he touches turns to gold and because of that, he’s the only guy that can make america great again.

That’s sums up Trumps whole campaign. The truth of that is shown in his calling people liars instead of putting forth persuasive arguments in the face of challenging rhetoric.

Therefore DT calls people liars because he seeks to shield brighter lights from better revealing his actual record for the low information people that are his most ardent supporters.

[Thibodeaux]

the fact is, no one gives a damn.

except to the envious ner do wells, it doesn’t matter

[LucyT]

The article is misleading and mostly wrong.

Misleading - the average reader understands the term *bankruptcy* to be the kind of asset liquidation and debt retirement.

NB.

Trump has never filed for Personal Bankruptcy.

The purpose of Chapter 11 is to keep people like Trump out of Chapter 13?

Wrong again.

When a business enterprise has continuing enterprise value which permits it to pay all its bills on a current operating basis, the general credit problem is cost of capital. Eleven is a device to provide for restructuring of the capital structure of the entity to permit it to continue operations, preserving jobs and productivity.

An eleven is part of the legal system in place when the enterprise borrowed the money; the lender knows if there is a payment problem, eleven exists as part of the solution.

And this fiction generally about *excessive debt* and the fact that the individual owner of a business borrower is at fault for having too much of it is also incorrect in the modern world.

The lending institution has a decision to make about loaning money to an entity--the fault for excessive debt is usually the greed of the lender who takes the risk of a reorganization proceeding when the enterprise is not as successful as the lender wished for.

In most cases, absent a Chapter 11 solution, the lender gets the business back and lacking the management capability to continue to operate, liquidates the assets and closes the doors.

There may be lots of reasons not to like Trump or not to vote for him but this is just not one of them.

Thanks, David.

[stephenjohnbanker]

Well done, David. The problem is many FReepers don’t understand CH 11, so assume the worst, especially if they don’t like Trump. Trump has NEVER complete a bankruptcy. Not personal, not corporate. He has suffered through 3 of the worst recessions, and survived.

[Marie]

You know what that is?

It’s where you explain. And explain. And put it in writing over and over again.

And other people just won’t let it go. They keep belaboring the point to exhaustion.

THAT is where people are getting sick of hearing about ‘Trump’s bankruptcies’ because it’s gotten stupid. So you just start waving people off because if they were really interested in knowing the truth, they’d take five minutes and look it up.

That’s where the average American begins to relate to him.

Isn’t is supposed to be forgiven after seven years?

The Bible says that it’s over after 7 years. I think that the rest of us can let it go after 20.

[spacejunkie2001]

or Cruz is a nasty liar
or I’m not a one issue voter
or....fill in the blank.

People behind trump are delusional.

[danamco]

The SOURCE !!!

Any further questions ???

[AuntB]

See post 66

[danamco]

Bump

[DAVEY CROCKETT]

Oh Please Trump put them in bankruptcy and then took them out, nothing more than reorganization. One has to do that from time to time if you are in business sometimes things don’t work out.

[MarvinStinson]

How did he get businesses he ran in such a position FOUR TIMES?

His corporations have filed for Chapter 11 bankruptcy four times. By filing for Chapter 11 bankruptcy, the corporation is allowed to continue running while restructuring and reducing its debt. By allowing the business to continue, employees still have their jobs and the business is still making money. Corporate debts still need to be repaid but they may be reduced. The corporation must develop a repayment plan and corporate budget. Both must be approved by the creditors and by the bankruptcy court.