A quick read that gives an overview of using real estate to collateralize a surety bond.
Very little will likely come as a shock, but it does paint a pretty compelling picture of the sort of due diligence that is done by a prospective surety, and of how far short of meeting the requirements Trump may very well fall:
It’s entirely possible that larger bonds have been posted in the past, AND insurers are refusing to offer a bond of that size to Trump.
Why not both?
Yeah–one person I read compared it to being convicted of selling a “diamond” ring that turned out to be cut glass, and appealing the decision, and offering the bond company a diamond ring for collateral.
Yeah, that’s the most likely explanation.
Thanks for this. Very interesting
A bond company specializing in supersedeas bonds? Another business we don’t have in Canada.
according to reporting (susanne craig, nyt) trump gave chubb his charles schwab account as collateral. that might be the most liquid and easily accessed assets.
it is reported that should “truth social” go public, trump will have a new fast amount of assets.
SEC clears Trump’s social media deal worth as much as $10 billion | Reuters
I wouldn’t be surprised if the timeline was a factor in a lot of bond companies telling him ‘no’ to real estate collateral. Given 6 months or a year to untangle the mess, there might well be a fiscally sound deal to be made, but in a week or 2, not so much.
Truth social might be valued at that, who’s going to pay for those shares? It’s not publicly traded, so I guess there’s an IPO at a value, and then there’s whether that gets that theoretical value. It’s not real money yet, if ever.
I haven’t followed the details, but wouldn’t it be possible for Trump to sell his stake in Truth Social privately – i.e., not on the market, but to a single entity that would then profit when the stock goes public?
I’m sure this would have to be done for pennies on the dollar, because AIUI the entire value of this venture is largely smoke and mirrors.
ETA: Or use his holdings as collateral?
there’s a reason why bond companies can’t take real estate as collateral: they are not allowed to, by law.
(paywalled link, but I think you can read 5 articles for free)Opinion | Conversations and insights about the moment. - The New York Times
Especially if one of the major stockholders starts dumping shares like it’s a fire sale. I think there are not enough rubes to buy them.
I wonder if there has been examples of such things before, a private company dumped before IPO and ruining any value. Ever since Musk’s twitter nonsense, there’s lots of social networks now, and Truth is based on a brand, Trump, who’s probably dead and gone in ten years. I think the “Truth social network will save him” is a dead end for a whole bunch of reasons, desperation, him being tied to it, It’s a house of cards which is tettering as we speak.
Ignorance fought, thanks.
Given a fairly quick look, I can’t corroborate what the Times says – that they cannot, as opposed to they will not, accept Trump’s real estate holdings as collateral for a surety bond.
Numerous articles cite numerous sources, including Trump’s attorneys, as saying some variation of:
Trump Organization general counsel Alan Garten wrote in the filing that surety companies are unwilling to accept real estate as collateral.
You’d think – if the Judge was ordering something that wasn’t legally permitted to happen – Trump’s lawyers (and Trump) would be shouting that from the heavily-leveraged rooftops, and that it may be a strong basis for appeal.
If anybody’s even remotely interested, I’d be curious if others can find a cite that corroborates the NYT on this bit.
ETA: from the recent court filing (linked above):
This is because sureties are generally (i) not in the business and therefore not equipped to manage, control, or dispose of real property; (ii) not willing to take the risk of having to sell off real estate quickly should a claim be made under a bond; and (iii) unable to offset the risk associated with underwriting a bond collateralized by real property because reinsurers are unwilling to insure such a bond.
Makes me think the NYT did get this one wrong.
AFAICT, Trump doesn’t own most of his assets free and clear.
He has other investors in some of the properties. In some cases he owns the properties but not the land they sit on. He has mortgages on other properties, and if the property has condos, those units are the properties of the homeowners. There are also LOTS of properties that bear the TRUMP name that he has no ownership interest in at all.
Here’s an NY Magazine article that looks at all his NYC properties individually , my apologies if it’s paywalled.
My favorite quote from the article is in relation to the Trump International Hotel and Towers, located on the southwest corner of Central Park.
Although it’s a popular target for anti-Trump protests, the Columbus Circle building, which is roughly half hotel rooms and half condos, is owned by General Electric and Ohio’s Galbreath Company, which hired Trump to glitz it up in 1996. What Trump does own here, according to the New York Times, are the parking garage, the valet booth, room-service kitchens, lobby bathrooms, a restaurant space, and one unit.
ETA - as I posted this, Discourse informed me that the link was posted last month. I think it has new relevance after yesterday’s news, though.
Please please please let NY seize whatever asset lets Trump hang his name on that Chicago tower.
I think when it comes down to it and all the mortgages, loans, leases, co-ownership etc. is all unraveled, we’ll find that really all Trump owns is the sign on the building and the urinal soaps in the lobby bathrooms.
I wonder if I’m richer than Trump.