Search This Blog

Defying the Odds

Defying the Odds
New book about the 2016 election.

Sunday, October 18, 2015

Trump's Victims

In Never Enough, Michael D'Antonio writes of Trump's corporate bankruptcies:
Lawrence Lambert, speaking for the investors who held Trump bonds, said, “I think it's morally reprehensible what he gets away with.” No one spoke for the millions of depositors and stockholders whose investments in various banks were diminished by the losses these firms accepted to square their accounts with Trump. Likewise, no one could place a value on the loss of public confidence caused by the spectacle of a tycoon walking away from obligations totaling more than half a billion dollars when ordinary American householders were ruined because they couldn't repay consumer debts of a few thousand dollars. In time, the phenomenon that spared Trump would be understood by the general public as "too big to fail."
Attacks on Trump's bankrupcties will have far more effect if the focus is on the people that he has hurt. The Press of Atlantic City reported in August:
But the bankruptcies — starting with Trump Taj Mahal, which bankrupted about a year after Trump opened it using $675 million in patently unsustainable junk bonds — were less displays of cool resourcefulness than frantic episodes of Trump scrambling to bail on bank debt and keep his perennially overleveraged casinos from going belly up.

“The project was dangerous in the beginning,” said Bryant Simon, a historian and Temple University professor who authored “Boardwalk of Dreams: Atlantic City and the Fate of Urban America.”

“A lot of people got stuck holding the bag, and he didn’t. So people resented him for that and felt serious financial pain.”

And it wasn’t just faceless bankers who got burned in the bankruptcies.

In the 2009 case, unsecured creditors — low-level investors, contractors, small-time vendors — got less than a penny on the dollar for their claims against Trump Entertainment Resorts (Trump resigned as chairman four days before the bankruptcy filing).

“He defaulted, and he walked away,” said Harry Smith, 87, a retired trial attorney formerly of Manasquan, Monmouth County, currently living in Jupiter, Florida. Smith saw about $91,000 evaporate from his retirement account when his investment in Trump bonds soured.

In Atlantic City, “he did do great,” fumed Smith’s wife, Lillian, 76. “He walked away with our money. But none of those casinos did great.”

“Luckily, we could absorb the loss,” she said. “You can find a lot of people who have a lot sadder story than ours. We’re just mad as hell.”

Contractors, who often bear the brunt of corporate bankruptcy, regarded Trump “as a jerk and a bum,” said Dave Farragut, president of United States Roofing Corp., a large roofing firm based in Norristown, Pennsylvania.