"Yah, ok..hmm..yah..ok..Wait..HOLY SHIT!" The Trump Org is in deep, deep trouble.

[Soph0571]

Link to tweet

Full thread by Kurt Eichenwald, @kurteichenwald for those who don't go onto the twitter verse.

As someone who has written for decades about corporate crime, I was reading the Trump O/Weisselberg indictment going, "Yah, ok..hmm..yah..ok..Wait..HOLY SHIT!" The Trump Org is in deep, deep trouble. And not because of the criminal charges. Because of its bank loan covenants.../1

...in fact, if even the smallest bit of this case is true, I think the Trump Org could be dead. It's complicated, but it primarily pertains to the 12th count of the indictment.
Taking this a step at a time: Like most real estate companies, the Trump Org is horribly illiquid...2

...this means it cannot readily convert its assets into cash as needed. Worse, because of the incredible incompetence and business idiocy of Trump, cash on hand (and access rapid loans through what is known as the commercial paper market) is small. So, the company survives.../3

...on loans against assets. Trump originally depended on bank loans, then jumped into high-yield (junk) bond market, which is why so many of his businesses went bankrupt: Junk bonds gave him lots of cash to spend, but he was too stupid to apply an analysis beyond "I'm great".../4

...to figure out how he was going to generate enough cash to pay interest on bonds. He couldn't. With his dad, he tried laundering money through Trump Castle to get past a requirement with his bank loans brought on by his junk debt, but got caught. Everything crashed down.../5

...so, the bottom line: Trump knows how to borrow money, he doesn't know how to manage it. Then came The Apprentice, which gave him lots of cash. Of course, he spent it all, then used assets he purchased as security to borrow from banks on apparent assumption that "I'm great"...6

...would fix any cash flow problems. He now has huge amounts of debt against assets that are plummeting in value because of January 6 and his toxic brand name. He *needed* the presidency to survive financially. I have always believed, that is why he is so desperate to keep it...7

....because if he was president, he could hit up the Russians, Saudis, etc to bail him out. Now, with him toxic and a threat to the country, those nations know that any secret payments they make to him run a huge risk of being discovered.
Which brings us to today's charges...8

...all bank loans with a business come with "lending covenants." These are basically a series of requirements, some of which include "you'll behave" in minor character. But *the most important part* of any loan covenant is the "books and records" portion. It is included in.../9

...every covenant for a bank loan to a business. The terms are simple: You maintain truthful books and records, you attest to us that they are truthful, and we are allowed to review them at any time. There is no "You can lie *just a little bit* on your books and records".../10

...it's all or nothing, like pregnancy: You either are or you arent. The books and records either are truthful or they aren't. Which brings us to count 12, which I think you can now understand the significance of:


...Forget Weisselberg. That is every every corporate defendant, every entity that could have a loan covenant in its name. Every Trump Org bank lender in the world, right now, is looking at this indictment, looking at their covenants, and calling the Trump Org demanding.../12

...they turn over every relevant book and record pertaining to these issues. If they refuse...BOOM. Loans pulled. If they do and the banks don't like what they see...BOOM. Loans pulled. If the loans come due (which 100s of millions do next year) no way they get refinanced..../13

...there may be something I am missing here, but I do not see how the Trump Org survives this without some sort of corrupt deal overseas. But even that seems far-fetched. Instead, it may be the biggest real estate corp bankruptcy in history..../14

......and given that those of us who covered his business for decades - back when he was a democrat/reform party/whoever would have him - and always knew he was a crook, all I can say is, what the hell took so long?

Emphasis mine

Seems like the Trump house of cards built on lies and grift is about to come down... oh my! How long before the bailiffs are knocking on the door of Mar A Largo?



What a glorious day that will be!!!
Please let this analysis be right on the nose.

[mucifer]

1. Thanks! but please edit OP to give credit to kurt Eichenwald from NYT

for the tweet

[Soph0571]

2. OK

But his name is up there on the tweet I posted...

[no_hypocrisy]

3. Goodbye Trump Tower.

Goodbye Mar-A-Lago.
Goodbye Bedminster (where Trump wants to be buried).
Goodbye Doral.
Goodbye Turnberry.
Goodbye Aberdeenshire.
Goodbye Doonbeg.
Goodbye Trump Winery.

Trump potentially faces homelessness -- and no place to play golf.

[AllyCat]

10. Good thing there is jail. He can live there.

I have this vision that his stupid tower is taken over by the banks/city/state/some entity and used to house the homeless.

[lastlib]

29. I'd prefer that...public housing at Leavenworth....

but first, I expect to see him in one of Jared's slum tenements.

[scarytomcat]

47. this is what I want to see

dump towers around the world and especially the old post office lease if he can't pay rent
and I hope loses the ice rink in New York City
then there is the unused mansion in rural New York
also all the buildings renting his disgraced name
GONE GONE GONE

[malaise]

4. Here comes The Reckoning

[Dan]

5. Mar A Largo is where I think that Trump made a big mistake

Because of the homestead act - he could have identified this as his home and kept it. Even tho’ there are legal issues with his residency at that location. But, he identified himself as an employee so that he could live there - thus (and I’m just speculating here) negating his rights to ownership of the property. So, to me, Mar A Largo is an asset that could be confiscated.

[AllyCat]

11. Yay!

[no_hypocrisy]

12. Mar-A-Lago

Karma, Baby!

The Post family wouldn't sell it to Trump. So Trump bought adjoining property and made MAL less valuable with his hijinks. So in the end, not only did the Post family end up selling the property/house to Trump but at a spectacular loss of profit.

[lagomorph777]

24. But who would want that roach hotel located in DeSatan's Florida?

[lark]

31. Rich and right wing infest FL just like the cockroaches. n/t

[Marcuse]

38. Visitors never forget their first Palmetto.

[PatSeg]

45. Oh god, thanks for the memories!

[Laura PourMeADrink]

40. So if you look at financial disclosures all the different entities

It reads like a master class in how to protect money. You'll see every type of entity that even exists. Just interesting because under his liabilities he lists the banks he owes money to and what the collateral is. I didn't see Mar-A-Lago listed there. Not sure if that means he owns it free and clear or not.

[Alpeduez21]

6. I feel really bad

For the Secret Service agents who will be assigned to stand guard outside the lazy lying steaming pile Hump’s cardboard box

[C_U_L8R]

7. Those earpieces.

May also double as sound cancellation devices.

[Maeve]

8. I hope he is right

I want to believe that consequences will happen for TFG, but I have doubts that the banks will finally stop letting him slip by.

[JudyM]

17. They could be forced to answer to their shareholders about this.

The decision to mitigate/pursue their losses may not be discretionary.

[3Hotdogs]

33. Also, last bank at the courthouse door is the loser.

Bank directors would want their bank to be the first to file.

[JudyM]

48. They're undoubtedly figuring out their strategy as we speak.

[KG]

9. so. not a billionaire.

which only the rubes believed anyway.

[samplegirl]

13. I'm glad he wasn't able to run

Our country like his business!

[PatSeg]

22. But he sure did try

He is a destroyer by nature and corrupts everything he touches. We are lucky to have gotten through four years of him.

[Laura PourMeADrink]

44. Well his combination of greed motivation and

some brilliant accounting may now show how effective it really is. May be a house of cards. But it appears he takes advantage of every loophole and protection allowed using a complex network of LLC and trusts and corps with no assets.

That said, long ago, even I believed it sounded good when he said he was going to teach this to us and show how he could change it all if he was prez.

[johnthewoodworker]

14. The truth will never stop a Republican/Nazi from lying to all his morons. He'll start selling

steaks, or school, or ties, or whatever the fuck else his friends can think about.

[samplegirl]

15. The only thing trump owned

was his name on hotels.

[Lonestarblue]

16. Melania should file for divorce quickly before all the money is gone.

There’s probably enough cash in the donations he has raked in by claiming to be fighting the big lie to pay off her prenup, illegally of course but what’s one more crime to a serial criminal?

[magicarpet]

18. Maybe Putie needs a groom of the stool and bed pan emptier,...

,... trDUMP would be an ideal candidate for that job.

[KS Toronado]

19. Eviction Notice at the end was a nice touch.

And just around the corner.

[smirkymonkey]

20. Mwahahaha!

[PatSeg]

21. "It may be the biggest real estate corp bankruptcy in history"

Well, that sure sounds Trumpian. He is always bragging about the biggest or greatest "in history" or "that the world has ever seen". He really likes everything in his world to be BIG. He should be so happy.

[FakeNoose]

25. Not only Chump's companies, but he could take down several banks with him

They're all shaking in their shoes right now. I don't think our government will have any desire to bail them out either. This isn't 2008, it's something entirely different. But bank failures can trigger other stuff that's unforeseen, in any case.

For one thing there will be auctions of Chump properties, and anybody with enough cash could snag some bargains.

[3Hotdogs]

30. Why would U.S. gub'mint bail out foreign banks?

[FakeNoose]

32. Well they wouldn't ... that was my point

[sarchasm]

37. Why not? They did it in 2008.

The reason presumably was so the rest of the banks, or banking system, wouldn't crash because they are all so intertwined. The whole thing is a shell game.

[PatSeg]

46. And they should have seen it coming

It was no secret what kind of man Trump was, so they shouldn't be surprised by these events. Essentially it was inevitable. Of course, I know it is all more complex than that and that there were foreign powers probably involved, but still, anyone with half brain surely knew that investing in Trump was the same as heading full speed off a cliff.

[packman]

23. Come on, we all know his cultist will bail him out

at worst, he'll get a vice-presidency job at Fox.

[TreasonousBastard]

26. This will be interesting. His 1992 bankruptcy was the big one...

He bought thr Plaza Hotel and almost all of Central Park South for top dollar and ran them all into the ground. When he went belly up, he owed so much that the banks were stumped. If they closed the businesses, they could go belly up themselves.

So, they let him stay alive, but under a very short leash.

That only allowed him to pull more stupid tricks and get in more trouble. If not for the TV show, he could become homeless.

[thesquanderer]

27. If ultimately it is the demands of the banks he owes money to that brings him down...

...he can't even claim it was democrats or deep state or political enemies, etc.

[oldsoftie]

52. YES! I've been saying all along this is better than jail

But he may be able to raise enough cash from his followers if he starts doing non stop "rallies" and charging for them
Or starts some type of subscription service BS

[riversedge]

28. Hoping it is true

[Beetwasher.]

34. Can't Wait Until They Seize Trump Tower, Sell At Auction and it Becomes "The Obama Civic Center"

Or something like that.

[sarchasm]

35. TY Soph!

Loan covenants .... Will this finally be the thing that brings down TFG's whole house of cards?

[Paladin]

36. I refuse to get my hopes up. I'll believe it if and when it happens.

Sorry, but trump has escaped legal and natural justice way too many times for me to feel optimistic.

[BradBo]

39. Don't forget that crook Jared!

[AllaN01Bear]

41. this has been quietly building for years . now the banks want their money back

and i will bet that the orange con man will figure out a way to get out of the mess. but the debit collectors call of the wild.

[bucolic_frolic]

42. They always short the government

or act against its authority. You gotta give 'em high marks for consistency.

[AllaN01Bear]

43. id like to see the whole fam including jar head and malaria goto jail but not mary.

[Pluvious]

49. Where, in all this mess, does the Russian money fit in ?

We kept reading about all these T.O. properties being sold for cash at inflated prices, etc.

Seems like that inflow of capital would play a significant role in the whole house of cards.

[Blue Owl]

50. It's delicious... simply delicious...

[oldsoftie]

51. Business failure is MUCH better than jail IMO

Jail makes trump a martyr
Failure makes him a........failure.