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Donald Trumps Business Failures Were Very Real
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Many of Donald Trumps tweets arent worth paying attention to, but on Tuesday morning he posted a pair that demanded inspection. Like many other people, me included, the President had apparently been reading a story in the Times that punctured the mythology surrounding his business career. Based on Internal Revenue Service transcripts of Trumps tax returns from 1985 to 1994, the Timesreport said that Trumps core businesses racked up losses of more than a billion dollars in a ten-year period. During 1990 and 1991, the story said, Trumps losses were so large that they were more than double those of the nearest taxpayers in the I.R.S. information for those years.
Trump could simply have ignored the report or dismissed it as old news. But, with cable-news networks featuring it prominently, and the Daily News, one of Trumps home-town papers, running the front-page headline BIGGEST LOSER, he did what he usually does and counterattacked. This is what he wrote on Twitter:
These are significant sums, certainly. But, as the Times article points out, depreciation charges arent nearly large enough to create the massive losses that Trumps businesses incurred. Some fraction of Donald Trumps losses can be attributed to depreciation, Susanne Craig, one of the authors of the Times piece, wrote in a , responding to Trump. We found most of it was just bad business.
Bankruptcy Is Not Synonymous With Failure
Although a corporate bankruptcy filing often indicates that a business is in a perilous financial condition, it doesnt necessarily sound the death knell for that business. The provisions of Chapter 11 of the U.S. Bankruptcy Code allow businesses to find ways to reduce their debt and restructure their operations without having to be shut down and liquidated to satisfy debts instead of closing their doors, businesses can stay open, pay their employees, and take in revenue while developing a budget and a repayment plan for creditors .
Many of the United States largest and most prominent businesses have filed for Chapter 11 bankruptcy protection one or more times, including General Motors, Charter Communications, Delta Air Lines, Kmart, Macys, and the Texas Rangers baseball team.
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Virgin Atlantic And Virgin Australia
Airlines were one of the first industries to feel the pain of the pandemic. Virgin Atlantic joined the fray in August 2020, filing for Chapter 15 bankruptcy as it worked to firm up a bailout aided by the British government. Its sister airline, Virgin Australia, had already filed for bankruptcy in April after the Australian government decided against a massive bailout. Delta owns 49% of Virgin Atlantic.
He Has A Talent For Real Estate But That Hasnt Always Translated Well To Other Industries
Trump has forged a successful real estate career over 45 years, profiting from flagship buildings like the Trump Tower on Fifth Avenue in Manhattan, the Trump Tower Chicago, and Mar-a-Lago, a private club in Palm Beach, Fla. His Trump Organization owns a portfolio of buildings, hotels and golf courses around the world.
Yet his real estate business isnt exactly the dominant force he suggests. Despite a national reputation as a New York property mogul, Trump doesnt make it into top 10 lists of the citys real estate players.
While his dealings in hotels and golf courses around the world appear to be success his companies are privately held, so details are scarce forays into casinos, airlines, professional football and other industries have ended badly.
Today, Trump describes these bankruptcies as if no one was hurt in the process, except high rollers and sharks. He says that he has started hundreds of companies, but only used bankruptcy proceedings four times. And he claims that Atlantic City has been a losing proposition for most entrepreneurs. “Almost every hotel in Atlantic City has either been in bankruptcy or will be in bankruptcy,” Trump said during the third Republican debate.
Michael dAntonio, who wrote a recent biography of Trump, says that is an incomplete assessment.
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Everything Trump Touches Turns To Trump
Trump has a kind of Midas touch: Many of the businesses he comes in contact with end up with his last name on them, often in large, gilded capital letters. Of the 515 companies that Trump has a part in running, 268 bear his last name, according to a filing with the Federal Election Commission. Yet not all of the buildings emblazoned with Trump’s last name are owned by him for many properties, he merely licenses his name to other developers.
DAntonio says the strategy of branding and franchising is unusual for a businessperson, and more reminiscent of a professional athlete. Donald is brilliant about turning himself into a walking brand, and he seized that opportunity pretty early, he says.
Trumps penchant for deploying his name has been a successful marketing strategy, but it also appears to satisfy a deeper desire for fame and accomplishment.
In addition to the Trump hotels and casinos, there are Trump-branded steaks , a Trump board game, the now-defunct Trump magazine and Trump Airlines, and a line of shirts and ties called the Donald J. Trump Signature Collection. Trump has put his name on water, Israeli energy drinks, cologne, Virginian wine, vodka, furniture almost anything that might be sold as high quality, high cost, and high-class, D’Antonio writes.
Trump still faces lawsuits from the venture, including a $40 million suit from the New York attorney general for defrauding students and operating an unlicensed university.
Did The Feds Program To Buy Corporate Debt Help High
The Fed has been there to solve the systemic issues. They dont want Treasury markets to seize up, mortgages to crash and large investment-grade companies to be unable to repay their debt. The bond-buying programs worked to reopen markets in April and helped many companies raise the cash they needed to weather the downturn. They also gave other lenders the confidence to lend, so the actual quantum of debt purchased by the Fed has been limited.
The Fed also has special programs for industries most impacted by the pandemic such as airlines and hospitals. One such program provides advanced payments on Medicare receipts so health care providers can get cash faster.
However, the impact of the Fed increasingly wanes as debt ratings decline.
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Employees And Contractors Left Out In The Cold
While filing for Chapter 11 reorganization is, as Trump has said, a normal part of doing business, it doesnt wipe the slate clean for everyone. When a business fails or goes bankrupt, it can leave employees and contractors stranded without receiving payment.
So while Trumps purchase of Trump Shuttle initially saved or created 1,000 jobs, the positive news didnt last long for the airlines employees. As Trump Shuttle faltered in 1990, the company laid off 100 employees. In 1991, when the deal with Northwest failed, 160 union employees found themselves fighting to attain their earned pay and benefits.
The failure of Trumps casinos has frequently had ripple effects for employees. In Atlantic City, when the three Trump-owned casinos Trump Taj Mahal, Trump Marina and Trump Plaza went belly up in 2004, many workers lost their retirement savings. The Trump company had pushed employees to accept company stock in lieu of other retirement savings. When the stock crashed in the wake of the bankruptcy, 400 employees lost US$2 million.
In addition to being sued for discriminatory hiring practices at the Gary, Indiana riverboat casino, Trump was sued by eight business partners who said they were cheated out of money on the deal.
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New York Bankruptcies Reportedly Surge 40% During Pandemic
- Bankruptcies in the New York City region have surged 40% during the pandemic, according to Bloomberg.
- The news outlet reported that 610 businesses filed for bankruptcy in the Southern and Eastern Districts of New York from March 16 to Sept. 27.
- Another flurry of bankruptcies and permanent closures is expected as cold weather arrives.
The crisis has hit a number of industries across the United States, with retailers and restaurants among those hardest hit. Century 21, the parent company of Chuck E. Cheese and Neiman Marcus are among the companies that have filed for bankruptcy as a result of the pandemic. But in New York City, which became the epicenter of the virus in March, the environment has been especially challenged. Tourism has plummeted, government officials have been more cautious about reopening the economy and many wealthy residents have fled to the suburbs.
From March 16 to Sept. 27, 610 businesses filed for bankruptcy in the Southern and Eastern Districts of New York, the publication reported Tuesday. The two districts include some counties in the city’s neighboring suburbs.
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Personal Vs Corporate Bankruptcy
One point of clarification: Trump has never filed personal bankruptcy, only corporate bankruptcy related to some of his business interests. I have never gone bankrupt, Trump has said.
Here is a look at the six Trump corporate bankruptcies. The details are a matter of public record and have been widely published by the news media and even discussed by Trump himself.
Did Gm Pay Back Its Bailout
Yes, its true that GM paid back its loan from the Treasury Department, in full, ahead of schedule. But the debt was only part of the automaker bailout package. Through the Troubled Asset Relief Program, the Treasury gave GM $49.5 billion, most of which was converted into an ownership stake in the form of stock.
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Trump’s Genius Is Building A Brand Even A Mythology
In the 1980s, Donald Trump was short on cash but eager to get Holiday Inn involved in a new casino project in Atlantic City. The construction wasnt far along, but the Holiday Inn executives were coming to town, and Trump wanted to impress them. So he ordered a construction crew to dig up piles of dirt and drive them around on the site as energetically as possible. When the Holiday Inn executives arrived, they were impressed and agreed to invest, Trump recalls in The Art of the Deal.
Trump’s greatest talent turns out to be not building businesses, but constructing a larger-than-life public figure. DAntonio says he thinks Trump has worked to create a strong brand mostly because his ego “needed the attention.” However, Trump also figured out how to make the attention profitable as well.
Trump’s personal brand got a huge boost from The Apprentice, the reality TV show in which Trump came off as a straight-talking truth-teller a decider who insisted on standards in a country that had somehow slipped into handing out trophies just for showing up, as The Posts Mark Fisher writes. In a recent book, Trump wrote that he didnt do the show for money, but rather because of the brand presence.
Through his career, Trump has had a knack for converting his outrageousness into profit. Now, says DAntonio, Trump is trying to convert it into votes.
What Donald Trump is doing on the campaign trail
Evergrande Went From Chinas Biggest Developer To One Of Its Worst Debtors
Regulators want to fix the property sectors bad habit of borrowing too much. Evergrande, with its billions of dollars in debt, may stand in the way.
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The company owes hundreds of billions of dollars. Its creditors are circling. Its shares have taken a beating. But if anything forces a reckoning for Evergrande, a vast real estate empire in China, it might be the nervousness of ordinary home buyers like Chen Cheng.
Ms. Chen, 30, and her husband thought they had found the perfect apartment. It was part of an 18-building complex in the southern city of Guangzhou, near a good school for their daughter and a new subway station.
Evergrande was asking for a deposit worth nearly one-third of the price before the property was completed. After reading headlines about the companys financial difficulties and complaints about construction delays from recent buyers, Ms. Chen walked away.
We dont have a lot of money, she said. We were really afraid this money would evaporate.
The problem is that some Chinese home buyers, once attracted to Evergrandes developments, have grown increasingly anxious about the company.
On Chinas internet, buyers describe waiting months or even years for their Evergrande apartments. Some have accused the company of using the pandemic as an excuse for further construction delays.
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Iran Says Oil Sales Have Had A Staggering Rise Over Past Year
— Sales of Iranian crude oil, gas condensates and petrochemical products have risen dramatically in the past 10 months, the countrys oil minister said.
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Addressing lawmakers in Tehran, Javad Owji said that Irans budget for the year to start March 21 has factored in daily oil sales of 1.2 million barrels, the ministrys official Shana news agency reported on Sunday.
No further details were provided, and exports werent mentioned.
China Gorges On Cheap, Sanctioned Oil From Iran, Venezuela
Iranian oil exports are subject to U.S. sanctions, and China remains Tehrans only known customer.
World powers are currently trying to revive the landmark 2015 nuclear deal which had eased sanctions on Irans crude exports. Then-President Donald Trump pulled the U.S. out of the accord in 2018 and reimposed heavy sanctions on Irans economy.
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Fact Checking: Donald Trump Has Filed Bankruptcy Six Times
The Differences Between Bankruptcies: Chapters 7, 11, and 13
Recently, I met a prospective client with over $30,000.00 in medical debt. She lives with her one minor child and her annual household income around $40,000.00. She can pay her basic bills, but the massive medical debt is a different story. The collection phone calls are picking up and her stress level is beginning to affect her health. This same woman filed for Chapter 7 bankruptcy relief 6 years ago following a job loss, meaning that she would not be eligible for another Chapter 7 bankruptcy filing for 2 more years. She looks at me and says If our President can file bankruptcy whenever he gets into a pinch, why do I have to suffer for 2 more years? She recalled a news story saying that President Trump had filed bankruptcy at least four times prior to becoming our U.S. President.
Fact Checking: Has Donald Trump filed for bankruptcy relief 4 or 6 times?
Lets do some fact checking about how many times Donald Trump has filed for bankruptcy protection and why there is some debate over this number. During the 2016 presidential campaign, Hillary Clinton correctly pointed out that Donald Trump had filed bankruptcy 6 times. Here is a quick breakdown of the six Chapter 11 bankruptcy filings by companies owned by Donald Trump. All six of Donald Trumps bankruptcy filings were prior to him becoming our current U.S. President.
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Smart Travel Tips: What Can You Do
One avenue to explore: Go to your credit card company and request a refund or charge back. And be aware that timing is critical. According to the Fair Credit Billing Act, consumers only have 90 days after they make a purchase to file a claim.
Travel Insurance Protection: If an airline liquidates, travel insurance might help. But be sure to check the fine print, as its not a guarantee.
Miles: If your airline is in trouble, you might want to quickly book a flight with your miles and use it at the very least, the ticket will have cash value versus the miles, which will have no value. Or use your miles in other ways, like to go shopping. If your airline is teetering on the verge of bankruptcy or has gone under, keep records of your miles. You can see if another airline will do a status match to attract your business and your loyalty.
Think Ahead: Heres a hack to consider if have have a voucher and are worried about your airlines well-being: Book a trip using the voucher and take out a travel insurance policy that covers bankruptcy. You might have a better chance of getting a refund.
Other Unsuccessful Trump Business Ventures
As outlined by Rolling Stone in 2016, the Trump brand has been associated with many business duds. Over the years, Trump has attempted to expand into multiple markets, some tangentially related to real estate, most not at all.
During the 2016 election, one of the biggest stories was a lawsuit over Trump University, a for-profit real estate seminar series that purported to teach Trumps business techniques. Some students paid upward of US$20,000 for tuition in the pseudo-university in which Trump had essentially no role.
Despite saying he would never settle the lawsuit, shortly after winning the 2016 election, Trump did settle and agreed to pay US$25 million to former Trump University students.
Another business venture was Trump Vodka, an attempt to get into the high-dollar liquor market that completely shut down in 2011. This was an unusual endeavor because Trump has insisted throughout his career that he doesnt drink.
Other failed ventures included Trump Steaks, Trump Magazine, two nonalcoholic beverages Trump Fire and Trump Power and GoTrump.com, an attempt to get into the online travel booking industry .
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