Trump’s business empire could collapse ‘like falling dominoes’ after ruling

[Whyayeman]

Of course, since Trump is smart! But not half as smart as he thinks he is. In civil cases the judge or jury can draw inferences from a refusal to testify, unlike criminal cases.

Civil cases have a lower threshold of proof, too, I think. 'The balance of probabilities' rather than 'Beyond reasonable doubt'.

He's toast!

 

[Bradskii]

Civil cases have a lower threshold of proof, too, I think. 'The balance of probabilities' rather than 'Beyond reasonable doubt'.


View attachment 336935

He's toast!

It's already the latter. The former is just a rubber stamp.

 

[eleos1954]

They need not go to law. They simply call in any outstanding loans. That could start the fire-sale of Trump assets. Other creditors join in with a view to cut their losses.

It is business, as Trump famously remarked.

When a person or business receives a loan there is a contract ... both are bound by that contract. There are reasons a loan company can "call in a loan" ... but that is usually because of non payment. Even then .... there are remedies that can be made. There is a process. It is up to the lender to proceed according to the contract ... whether or not the contract was violated ... lender NOT a judge arbitrarily sticking their nose into it. So ... since the judge IS sticking her nose into it .... saying Trump gave fraudulent info to lending companies ... then likewise the lending companies need to be looked into to see if they were culpable as well.

Loans go through underwriters ... and their job is to verify assets and income. Were they culpable?


Underwriter Job Responsibilities:

Analyze financial data related to loan requests. Evaluate loan documents are to insure accuracy and completeness. Perform risk assessments on potential loan recipients based on credit rating, borrowing history, and other specific risk factors.

Lenders don't give loans just on someone's "say so" .... they request and obtain documentation ... tax records, assets and liabilities, bank records, credit history etc.

If fraud is suspected ... the case needs to be brought forth by the lending institutions not some "rogue judge".

This judge is citing Trump overstated with worth of his properties .... worth of properties are determined by an appraiser ... was an appraisal required by the lender? If not ... why not? Really if the judge is looking into something she should be looking at the lenders.

 

[Larniavc]

If so, then they can do it to anyone for any reason.

As long as any reason means fraud.

 

[Whyayeman]

Loans go through underwriters ... and their job is to verify assets and income. Were they culpable?

Maybe they were. If so, prosecute them too.

Really if the judge is looking into something she should be looking at the lenders.

But the lenders are the ones defrauded. How were they culpable? For not spotting the fraud?

The legal arguments are not really the point. Once a business is suspected of being insolvent (its debts exceeding its assets) it will be shunned. Loans become difficult to negotiate because of the extra risk to creditors. Creditors will seek to call in their debts or renegotiate interest and charges (see above).

All legal actions taken to recover debts will add to Trump's already enormous problems in American courts.

 

[Mike from NJ]

Who ever thought this guy was a good businessman? He had multiple failed casinos in Atlantic City. He was constantly sued for not paying vendors. Apart from maybe his golf courses (one of which Ivana unceremoniously buried at) his fortune is smoke and mirrors. He recently, claimed Mar-A-Lago was worth over a billion dollars based solely on his own estimate, with the judge valuing it at a more likely$18 million.

Edited to go from HTML formatting to one for this forum. Thanks, Pommer.

 

[Pommer]

Who ever thought this guy was a good businessman? He had multiple failed casinos in Atlantic City. He was <i>constantly</i> sued for not paying vendors. Apart from maybe his golf courses (one of which Ivana unceremoniously buried at) his fortune is smoke and mirrors. He recently, claimed Mar-A-Lago was worth over a billion dollars based solely on his own estimate, with the judge valuing it at a more likely$18 million.

“Square brackets” [] not <>

 

[eleos1954]

They need not go to law. They simply call in any outstanding loans. That could start the fire-sale of Trump assets. Other creditors join in with a view to cut their losses.

It is business, as Trump famously remarked.

There is a contract .... a contract is agreed to .... a contract is a lawful document and guides the process of paying back the loan if there are any issues that rise up. I am involved in real estate (small scale) and read every single word in them (terms of agreement)

 

[Whyayeman]

There is a contract .... a contract is agreed to .... a contract is a lawful document and guides the process of paying back the loan if there are any issues that rise up. I am involved in real estate (small scale) and read every single word in them (terms of agreement)

Quite right. That is due diligence.

Can we be certain that the high standards you keep to were followed scrupulously in Trump's case? Perhaps the fact that there is an ongoing legal issue is because they weren't. The only alternative is to conceive the trial as a massive conspiracy.

We will begin to see the evidence - tomorrow!

 

[eleos1954]

Quite right. That is due diligence.

Can we be certain that the high standards you keep to were followed scrupulously in Trump's case? Perhaps the fact that there is an ongoing legal issue is because they weren't. The only alternative is to conceive the trial as a massive conspiracy.

We will begin to see the evidence - tomorrow!

If the contract was not adhered to it's up to the lenders to litigate it ... not some arbitrary action by a judge. Each loan is a separate contract and if litigated would need to be done on each loan and according to the legal contract of each loan.

To determine if the loans given were a "massive conspiracy" ... then the judge would need to investigate the loan companies as well.

 

[Mayzoo]

If his business certificates are canceled, and he is no longer able to conduct business at the site the loan was for (not sure if this is what is going on, but this is what I got from it), then I would presume any lender can easily recall the loan.

There are usually conditions to most loans, and keeping the doors open for a business loan seems like it would always be a caveat. That and most loan applications I have ever seen state if you swear that the information you provided is true and accurate, and the loan be revoked if the lender finds proof you lied on a loan application.

 

[Diamond7]

Once business confidence starts to slide all debts will be called in.

Do you think bankers are to stupid to know what he is really worth?

 

[Bradskii]

Do you think bankers are to stupid to know what he is really worth?

I've likewise been puzzled by what would appear to limited checking by the banks as to the valuation before the loans were issued. But I was assuming the loans would be similar to one I would get from my bank based on the value of my property. Which would have been the mortgage I had on it. And my bank was very specific about what the house was worth at the time. They most definitely didn't rely on my valuation. But...

...Trumps loans went through a different process and some of them were unsecured personal loans which only required an annual financial statement. They didn't require asset valuation by the bank because the statement was meant to represent his net worth. It's not possible to value every single aspect of any one person's wealth. However, theperson has a legal obligation not to inflate their worth to get a loan. It's fraud.

Here is copy of the key facts which I copied from a Quora answer. There is a lot more but I won't clog up the thread with all the details. Here's the link if you want to read through it all:

Why is it a big deal that Trump overstated the value of his properties? Don't banks require an independent appraisal when taking real est...

Answer (1 of 12): It’s a fair question and I understand your confusion. Many have wondered about this, including me, but it’s all explained in the legal filing. Those who insist Trump’s fraud doesn’t matter because banks usually base property loans on appraisals don’t realize some key facts: 1....

www.quora.com

1. Trump’s loans went through a very different approval process than the standard loan, which made the fraudulent claims about his financial condition instrumental to getting loans.
2. Some loans were “unsecured personal loans” based on fraudulent financial claims he submitted annually, not on an appraisal.
3. His financial statements were insanely fraudulent.
4. Some independent appraisals were done and that is one of the ways we know his other claims were so far from the truth.
5. When there were appraisals, there were numerous misrepresentations made to, and material pieces of information withheld from, appraisers.

The rest of the info is quite detailed and references specific sections of the lawsuit and explains why they are valid. And why Trump's actions are deemed fraudulent. Just to highlight two items in the lawsuit:

584. The credit memo listed this guaranty as a source of repayment, and recommended approval of the loan. The memo stated that “[t]he Facility is being recommended for approval based on” a series of factors, the first of which was “Financial Strength of the Guarantor” and another of which was the nature of the personal guaranty. In connection with that recommendation, the credit memo evaluated assets reported on Mr. Trump’s Statement of Financial Condition…

…588. The loan agreement, signed by Mr. Trump, required that Mr. Trump’s June 30, 2011 Statement of Financial Condition have been provided to the bank as a precondition of lending.

In other words, he was getting a loan based on what he stated was his net worth, which would obviously include individual properties. But it wasn't a requirement that those individual properties needed to be individually appraised to guarantee the loan.

However, some appraisal was done at some point and rang alarm bells as to the validity of his Statement of Financial Condition. Hence the position he is in at the moment.

And, by the way, whilst grossly increasing the valuation of his properties to obtain loans, he apparently grossly decreased the valuation when it came to paying his tax. Not exactly a smart move...

 

[Diamond7]

However, theperson has a legal obligation not to inflate their worth to get a loan.

Then you would have to put everyone in jail. The general rule of thumb is people who are rich, claim to be poor. People that are poor claim to be rich. Poor people do not want you to know how poor they are. Rich people do not want you to know how rich they are. Then you have people in third world nations and they think everyone is rich in America. So do you want to throw people in jail for being American? Because we put on the pretense of being a rich country?

 

[Desk trauma]

Then you would have to put everyone in jail.

No, not everyone has committed fraud to get loans.

 

[Bradskii]

Then you would have to put everyone in jail. The general rule of thumb is people who are rich, claim to be poor. People that are poor claim to be rich. Poor people do not want you to know how poor they are. Rich people do not want you to know how rich they are. Then you have people in third world nations and they think everyone is rich in America. So do you want to throw people in jail for being American? Because we put on the pretense of being a rich country?

It's one thing pretending to be rich. It's another thing entirely when you actually lie about it in a legal document to obtain a loan. That's against the law and you could end up in jail.

 

[Diamond7]

It's one thing pretending to be rich. It's another thing entirely when you actually lie about it in a legal document to obtain a loan. That's against the law and you could end up in jail.

Maybe you should put woman in jail for wearing a padded bra. That is a lie. Maybe you should pass a law against using photoshop to retouch a photo. That is a lie also.

 

[Diamond7]

No, not everyone has committed fraud to get loans

Everyone commits fraud. There are no exceptions. Only the ones who are the worst offenders are the quickest to accuse others of what the are guiltily of doing.

 

[Desk trauma]

Everyone commits fraud.

Incorrect.

 

[Pommer]

Everyone commits fraud. There are no exceptions. Only the ones who are the worst offenders are the quickest to accuse others of what the are guiltily of doing.

I don’t live in a world where everyone “commits fraud”.
I know honest people who don’t.