Yesterday we linked to The Dynasties that Own Manhatten.
This morning, the Wall Street Journal Online bring us a story of one of the Dynasties.
Buyers Lambaste Developer,
Whose Coffers Seem Secure
Even the Trump name isn't bigger than the calamitous condo market.
Donald Trump's reputation as a real-estate developer could take a hit as some condominium projects emblazoned with his famous name run into trouble.
In recent years, Mr. Trump has lent his name, and in some cases his own money, to at least 20 projects in the U.S. and another half dozen abroad, including buildings in Dubai of the United Arab Emirates and Seoul, South Korea. While in some cities such projects are doing fine, others face slow sales, project delays and cancellations -- and irate buyers....MORE
One of my favorite Trump stories comes from The Donald's scramble to meet a junk-bond payment back in the early nineties:
...It definitely represents another advance in the art of the deal. The deal this time revolved around Donald's astonishing success in meeting a bond interest payment at the Trump Castle casino after his father lent him the requisite $3 million.
The loan took a most original form: Fred Trump, age 85, arranged for his lawyer to visit the Castle, march up to a high-stakes blackjack table, and buy some $3 million worth of $5,000 chips. Instead of then playing blackjack, as any normal sentient being might do, the lawyer placed them in a satchel and presumably lugged them back to Fred, who now had his collateral.
Why structure the loan this way? Obvious answer: to protect Dad in case the Castle sashays into Chapter 11. With an ordinary loan, Fred would then be in line with a whole bunch of towel suppliers and other shafted creditors. But the integrity of the casino industry depends on the players' ability to cash in their chips. ''Chips are always redeemable,'' states the mighty Casino Control Commission.