Trump and the Race for Cash

[Wrestleknownothing]

A fascinating race is being set up.

Donald Trump needs to post a $454 million bond in order to appeal his fraud conviction in NY. If the deadline is not extended, the bond is due on Monday. As of right now, Trump is having a hard time securing financing for the bond. How strange. His defense was that whatever he made up about his financial condition was fine because banks were willing to lend to him regardless, since they knew he was worth far more than the loans. Now he can't get them to lend him money against his real estate holdings.

Instead they want cash or marketable securities. And of course, they take a haircut, so they actually want something like $557 million of securities to lend him $454 million. 

Meanwhile, DWAC, the SPAC looking to acquire Trump Media, has a shareholder vote on Friday to approve the deal that would be worth ~$2.8 billion to Trump. 

If the vote is Friday and the bond is due Monday, can he get the shares in time? Not normally, but I wouldn't count it out in this case. He would also need to get DWAC to agree to wave a provision that says he cannot sell or post the shares as collateral for at least six months (lockup agreement), which, I think they would.

But if you are a bank, how much would you lend against those shares? Before you answer, remember that DWAC is a meme stock. Truth Social has never made money. The stock price is pretty much a measure of Trump's celebrity. And the stock is locked up for six months. So if things went sideways you could not sell the collateral for some period of time.

Aint finance grand?

[mspart]

The fine was a crock.  It was designed to do just this. 

mspart

[Wrestleknownothing]

2 minutes ago, mspart said:

The fine was a crock.  It was designed to do just this. 

mspart

probably

[Offthemat]

The reluctance to enter into this situation, even at fire sale rates, is evidence of the fear of being the next target. 

[Wrestleknownothing]

1 hour ago, Offthemat said:

The reluctance to enter into this situation, even at fire sale rates, is evidence of the fear of being the next target. 

Alternative interpretation. This is an example of risk management and pragmatism writ large.

When asked to testify that they were harmed by Trump inflating the value of his assets, the banks made a very pragmatic choice. Having been paid back in full there was no point, and a lot of business risk, to poke at the presumptive Republican nominee for President. Kind of like testifying against Santa Claus in Miracle on 34th Street. So they declined to testify against him. There was no upside, only downside.

But now that the question is, do you want to lend him money again against what he says his real estate is worth? The answer is a resounding no. Kind of an endorsement of the verdict.

Are you upset he did it? No. Are you willing to do it again? Also, no.

[JimmyBT]

2 hours ago, mspart said:

The fine was a crock.  It was designed to do just this. 

mspart

This  

[Offthemat]

35 minutes ago, Wrestleknownothing said:

Alternative interpretation. This is an example of risk management and pragmatism writ large.

When asked to testify that they were harmed by Trump inflating the value of his assets, the banks made a very pragmatic choice. Having been paid back in full there was no point, and a lot of business risk, to poke at the presumptive Republican nominee for President. Kind of like testifying against Santa Claus in Miracle on 34th Street. So they declined to testify against him. There was no upside, only downside.

But now that the question is, do you want to lend him money again against what he says his real estate is worth? The answer is a resounding no. Kind of an endorsement of the verdict.

Are you upset he did it? No. Are you willing to do it again? Also, no.

This would not be doing it again.  It’s not a loan for a project.  It’s injecting yourself into a litigation, putting your head on the chopping block, in a matter that is being adjudicated on ideology alone, in an overwhelmingly ideological arena.  You cannot honestly say that this process has been representative of historical American jurisprudence.  

[Wrestleknownothing]

23 minutes ago, Offthemat said:

This would not be doing it again.  It’s not a loan for a project.  It’s injecting yourself into a litigation, putting your head on the chopping block, in a matter that is being adjudicated on ideology alone, in an overwhelmingly ideological arena.  You cannot honestly say that this process has been representative of historical American jurisprudence.  

Developers always put debt on their completed projects. Real estate is built on leverage.

And there is no putting your (lender's) head on the chopping block. The court has no recourse to the lender. They only have recourse to Trump, which is why he needs the loan. Which is why the lender wants collateral and recourse.

[mspart]

Does Trump not own properties more than sufficient for the bond?  There is the collateral.   But this is political and I agree with Off that they don't want to inject themselves into that. 

Is the 450Million fine justified?   If it keeps Trump off the ballot yes.   If it bankrupts Trump yes.   And that folks, is the reason for the unjustified amount levied.   To get Trump.   Not for what he's done in the business square, but for what he's done in the political square.  That is unjustified persecution of a single man for what he represents.   This is not blind justice.   The judge had it out for him from the beginning.   I don't think anyone thought such a heinous levy would be imposed.   And to tie appeal to bond is ridiculous.   That is unjustified.  

mspart

[Offthemat]

7 minutes ago, mspart said:

Does Trump not own properties more than sufficient for the bond?  There is the collateral.   But this is political and I agree with Off that they don't want to inject themselves into that. 

Is the 450Million fine justified?   If it keeps Trump off the ballot yes.   If it bankrupts Trump yes.   And that folks, is the reason for the unjustified amount levied.   To get Trump.   Not for what he's done in the business square, but for what he's done in the political square.  That is unjustified persecution of a single man for what he represents.   This is not blind justice.   The judge had it out for him from the beginning.   I don't think anyone thought such a heinous levy would be imposed.   And to tie appeal to bond is ridiculous.   That is unjustified.  

mspart

He might get a better deal going through the Hunter Biden Bonding Agency LLC.  

[ThreePointTakedown]

14 minutes ago, mspart said:

Does Trump not own properties more than sufficient for the bond?  There is the collateral.   But this is political and I agree with Off that they don't want to inject themselves into that. 

Is the 450Million fine justified?   If it keeps Trump off the ballot yes.   If it bankrupts Trump yes.   And that folks, is the reason for the unjustified amount levied.   To get Trump.   Not for what he's done in the business square, but for what he's done in the political square.  That is unjustified persecution of a single man for what he represents.   This is not blind justice.   The judge had it out for him from the beginning.   I don't think anyone thought such a heinous levy would be imposed.   And to tie appeal to bond is ridiculous.   That is unjustified.  

mspart

Whose valuations of the properties do they trust to cover the amount? 

The already agreed to fudged amount that no one should trust or an 'independent' appraisal that you won't trust anyway. 

Vae Victis 

Lots of things happened on the long road to now. Different choices could've been made to avoid it but seems like it was inevitable considering the temperament and unethical nature of the defendant. 

[JimmyBT]

Unethical nature of the defendant.  For a captured unlawful immigrant. 

Edited March 20 by JimmyBT

[Wrestleknownothing]

40 minutes ago, mspart said:

Does Trump not own properties more than sufficient for the bond?  There is the collateral.   But this is political and I agree with Off that they don't want to inject themselves into that. 

Is the 450Million fine justified?   If it keeps Trump off the ballot yes.   If it bankrupts Trump yes.   And that folks, is the reason for the unjustified amount levied.   To get Trump.   Not for what he's done in the business square, but for what he's done in the political square.  That is unjustified persecution of a single man for what he represents.   This is not blind justice.   The judge had it out for him from the beginning.   I don't think anyone thought such a heinous levy would be imposed.   And to tie appeal to bond is ridiculous.   That is unjustified.  

mspart

I think that is standard.

https://www.americanbar.org/groups/judicial/publications/appellate_issues/2019/summer/staying-judgment-with-appeal-bonds/

[mspart]

Ok, I can see what you are saying.   But if they fine you more than you are worth, how can you appeal.   Seems like a fallacy that's been set up.   Not saying Trump's amount is more than he is worth.   Agreeing with Off.   The properties he has are worth more than 1/2 billion.   This is a political minefield to get entangled with.   I think that plays heavily into the calculus.

https://www.forbes.com/sites/danalexander/article/the-definitive-networth-of-donaldtrump/?sh=528bad652a8e

This takes into account worth of property, debt he has, and then net worth.   Above is net worth of properties.   As can be seen easily, he has enough per Forbes in Sep 2023.   Therefore there should be no monetary reason he could not get the bond.   Other reasons are at play here. 

mspart

mspart

[Wrestleknownothing]

1 hour ago, mspart said:

Ok, I can see what you are saying.   But if they fine you more than you are worth, how can you appeal.   Seems like a fallacy that's been set up.   Not saying Trump's amount is more than he is worth.   Agreeing with Off.   The properties he has are worth more than 1/2 billion.   This is a political minefield to get entangled with.   I think that plays heavily into the calculus.

https://www.forbes.com/sites/danalexander/article/the-definitive-networth-of-donaldtrump/?sh=528bad652a8e

This takes into account worth of property, debt he has, and then net worth.   Above is net worth of properties.   As can be seen easily, he has enough per Forbes in Sep 2023.   Therefore there should be no monetary reason he could not get the bond.   Other reasons are at play here. 

mspart

mspart

There are certainly frictions involved. The insurers who post bails typically do not accept real estate as collateral as they do not have the methods in place to place liens and to liquidate like a bank does. So to use real estate it becomes a two stage process. Borrow money from banks against real estate collateral, pledge resulting cash to surety company to post bond. That takes time and is pretty expensive with all those mouths to feed.

That is why DWAC is so important. As a marketable security, that is something surety companies are used to dealing with. But issues of liquidity, meme-ness, lock ups, etc. would have to be dealt with.

[jross]

5 hours ago, Wrestleknownothing said:

Trump can't get funds; would you lend him money?

Lending money to Trump before the election outcome seems like a dumb move. Who would bet on getting paid back by someone who's getting dragged through the mud with legal troubles and manufactured debts?

[Wrestleknownothing]

1 minute ago, jross said:

Lending money to Trump before the election outcome seems like a dumb move. Who would bet on getting paid back by someone who's getting dragged through the mud with legal troubles and manufactured debts?

That is where collateral and recourse come in.

[mspart]

He has collateral as I demonstrated.   That is not helping him so that is not the answer.    There is no recourse unless he gets the bond.   But demonstrably he has the collateral for such a bond.   

mspart

[Wrestleknownothing]

35 minutes ago, mspart said:

He has collateral as I demonstrated.   That is not helping him so that is not the answer.    There is no recourse unless he gets the bond.   But demonstrably he has the collateral for such a bond.   

mspart

He doesn't have the kind of collateral bond companies take (see my prior post), so he would have to involve another intermediary.

[Offthemat]

How would it go if he lets NY take possession of the property and after going to the expense of seizure, managing, process of sale, he wins the appeal and they have to return the property to him?  Be careful what you wish for.  

[Wrestleknownothing]

48 minutes ago, Offthemat said:

How would it go if he lets NY take possession of the property and after going to the expense of seizure, managing, process of sale, he wins the appeal and they have to return the property to him?  Be careful what you wish for.  

That is the bitch of it, and part of Trump's bond argument. They would only have to return the cash raised and not the property. So if they sell the property at fire sale prices then have to return the money, Trump is the one who is harmed. He argues it will cause irreparable harm. I can sympathize with that argument. So maybe they are allowed to seize, but not sell until after appeals are wiped out.

Trump makes a second good argument. He points out there is no victim (unlike with Jean Carroll), and one reason for the appeal bond is to ensure you cannot dodge paying your victim.

Maybe he wins his bond argument and can appeal under easier terms.

[jross]

3 hours ago, Wrestleknownothing said:

That is where collateral and recourse come in.

When a company goes out of business, who has first rights at funds?  It is not the common shareholder.  What are the details here between legal payouts and collateral on loans, etc.?

[Wrestleknownothing]

8 minutes ago, jross said:

When a company goes out of business, who has first rights at funds?  It is not the common shareholder.  What are the details here between legal payouts and collateral on loans, etc.?

I don't think the govt can seize something that is already pledged as collateral against a loan. Lenders have a lot of experience writing contracts that protect their claims. And form first principles, if that wasn't the case it would be real hard for collateralized lending to exist.

My guess is that the penalty cannot be discharged in bankruptcy, but general creditors could lose out.

[Brownwrestler1975]

Our very own oligarchs will use their dark money 

[ionel]

3 hours ago, Wrestleknownothing said:

I don't think the govt can seize something that is already pledged as collateral against a loan. Lenders have a lot of experience writing contracts that protect their claims. And form first principles, if that wasn't the case it would be real hard for collateralized lending to exist.

My guess is that the penalty cannot be discharged in bankruptcy, but general creditors could lose out.

The AG is probably just going to end up screwing New York, not that anythings wrong with that.  

Edited March 21 by ionel