Financial journalist Bill Cohan Predicts Trump Will Declare Bankruptcy
By: Mediaite
S E E D E D C O N T E N T
Financial journalist Bill Cohan predicted that Donald Trump will declare bankruptcy when he's unable to produce the $464 million bond that's due on Monday.
Cohan spoke with Puck's Peter Hamby on The Powers That Be: Daily podcast about Trump's financial situation and the looming deadline to pay the bond.
"You suggested something that would seem pretty crazy for a guy who's so egotistical and proud of all his money and accomplishments," Hamby said. "You suggested that he might have to file for bankruptcy or he might file for bankruptcy? How likely would that be?
"I think it's his only choice at this point. The only way he's going to — unless the court of appeals comes through for him and reduces the amount of what he has to pay, or the bond, or gives him more time. Again I don't see a New York State court of appeals doing that for this guy. Why should they? But they might," Cohan said, continuing:
So, if that happens, OK, that's one way. If that doesn't happen, then he's out of luck, and he's going to have to file for personal bankruptcy because that way, he can stay the judgment, stay any asset sales, buy himself a whole lot of time. You know this thing going into bankruptcy court would definitely buy him time. Maybe a year, maybe two years, it's like a freefall bankruptcy. Who knows what kind of mess he's got there?
And you know he could — and you know state of New York becomes a general and secured creditor of the Trump Organization or Donald trump personally, whatever ends up being the debtor here. And who knows where they would fall or what kind of recovery they would get? That's probably his best way to reducing the size of the judgment. It's his best way of having like an orderly sale of his assets. You know, he will lose them. He will lose the assets, absolutely. He'll have to pay the judgment. But it would all be done in a much more timely, slower, more orderly way than in the next five days.
Trump's lawyers admitted in a court filing last week that he could not secure the bond for his civil fraud judgment, calling it a "practical impossibility." But Trump, in a Truth Social post, declared he had $500 million in cash, "A SUBSTANTIAL AMOUNT OF WHICH I INTENDED TO USE IN MY CAMPAIGN FOR PRESIDENT." It remains to be seen which way things will go for the former president on Monday.
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he has no problem filing for bankruptcy. normal people might, but he doesnt.
what’s your point, we already know that neither Trump nor a $464M bond is normal.
I was wondering what the alleged billionaires' options were if he didn't have the money that he claims to have.
His big fat mouth never fails to write checks it can't cash.
Isn't James' next step to liquidate properties? Can she do that if properties are mortgaged to the hilt or whatever the lingo/situation is????
Meanwhile on Skid Row...
I do not see this. Bankruptcy would weaken his perceived invincibility and I doubt his ego could handle this now that he is so public. Trump cannot handle being tagged a loser. And he just claimed he has the money … illustrating no intention to admit he cannot deliver the bond money.
Besides, his company assets are likely worth more than $500 million. Bankruptcy, if so, makes no sense financially.
And finally, bankruptcy is a big deal. It screws a company for years. It should be the absolute last resort.
His best bet is a loan from his daughter or having someone purchase his Truth Social stock for a bargain based on future value.
when you lie like trump, the people who you care about, their opinion, will not call you a loser, they will call you a victim.
If he declares bankruptcy the saps will start sending him money like never before.
John, Tig is right on this one.
His assets are more than likely worth well more than 500 million. Any bankruptcy judge will see right through this and call bs on it.
It's highly likely the order will be extended anyway. There may actually be a sane judge in New York that will see this judgement as excessive.
I do not think his ego can take losing his image of a highly successful billionaire. Declaring bankruptcy for $500 million pretty much proves that you are not a billionaire.
His supporters will of course present this is the most favorable light. They are unreachable and I do not consider them. I am referring to everyone else. Trump's ego would explode with all the loser talk from everyone else.
Do you really think he would refrain from filing from bankruptcy, if it was actually available to him as a remedy, which I don't believe it is, if he could save $500 million dollars? I don't.
If he is worth less than $500 million then bankruptcy would be an option he might consider. Hard to say what he is worth, but Forbes, et. al. seem to think his net worth is around $2.6 billion. And the Truth Social IPO will add to that (not likely as much as predicted). So I am inclined to think he is worth more than $500 million and thus bankruptcy would be brain-dead stupid for him. Even if it could clear his legal debts (and I too do not believe that would be the case).
He will, of course, be martyred by those who already consider him as such. No net advantage. But others who have been going with the flow would likely find this to be over the top. Same if he were convicted of a felony.
This might not cause a switch to Biden, but I would expect a significant hit in voter turnout for Trump.
On top of this, it is crazy for Trump to claim he has $500 million in cash (that he was going to use for the campaign ... amazing people believe anything this liar says) and then within days declare bankruptcy due to a $454 million obligation. How could anyone not find that to be highly irrational behavior?
I have to disagree with that one. He's done a lot worse things than declare bankruptcy, with no loss of support.
Many in NYC real estate believe Trump's true net worth is near the original half billion $ Fred Trump gifted him ..
I can't imagine anyone, unless maybe they were worth tens of billions, not doing everything possible to save $500 million. Probably even if they had tens of billions.
He will not lose his die hard MAGA support, but as you extend from that core the conviction to get out and vote for Trump wanes.
In other words, if Trump's MAGA base are the only ones voting for him, he loses. Trump necessarily must get tens of millions of others to vote for him.
It depends on what we are talking about. Of course people would do substantial things to save $500 million. Declaring bankruptcy, however, is NOT a method for saving money. Your assets are sold at far lower values. There is no saving taking place. Bankruptcy is an orderly process of losing; it is a method of going to net worth of essentially zero and avoiding being perpetually hounded by creditors (what would happen if your net worth was negative).
Further, anyone whose net worth is substantially over $500 million would not even be allowed bankruptcy protection to alleviate a $500 million dollar debt (if this was even possible for a legal obligation). They would be ordered to pay their bills.
I do not know, JBB. That does not seem to jive with other reports (e.g. Forbes).
Maybe this will be clearer tomorrow, but right now Trump sure seems to have a net worth substantially higher than $500 million.
Another angle is bankruptcy for restructuring debt. This is, if anything, how Trump could proceed. This would enable him to hold off paying debts to private sector creditors so that he can use his available liquidation to pay his legal obligations.
It would be a way of buying time. So this is not a fire-sale, but rather a time-out.
And, again, he is not saving any money. He will lose in the process. Just not as much as if his assets were seized and sold by the state.
The lengths Trump has gone to and extraordinary pressure Trump has applied to basically force Forbes to inflate his net worth, including suing them over it, is legendary in NYC...
As I discussed below, reorganization could be an avenue for Trump. It might at least buy him time and possibly lead to negotiations over the anount owed. That is assuming, of course, that bankruptcy is available to Trump here, which I believe is not so the entire discussion is moot.
I do not doubt that, but that does not tell us what he is actually worth.
I do not know what he is worth ... can only go by the available info.
Yes we are saying basically the same thing.
Agree
I keep hearing about this in the media, but it's my understanding that the New York judgment is based on allegations of fraud and that you CANNOT bankrupt out from a fraud judgment. Likewise, you CANNOT bankrupt out from a judgment for defamation as in the E.J. Carroll case. Possibly there are some exceptions I am not aware of, or somehow Trump could gain an advantage by reorganization through bankruptcy, although I don't see how, or the New York case is based on allegations other than fraud. I would like to hear a definitive opinion from a bankruptcy specialist with actual knowledge of the facts and the applicable laws that formed the bases of the two cases. The opinion of a financial journalist doesn't mean much.
I also don't think much of the idea that Trump wouldn't file for bankruptcy to avoid looking like a loser if he could save $500 million dollars. He can always claim something like: "the judgments against me were corrupt and unfair and I availed myself of the bankruptcy courts, as I have done 6 times in the past, in order to combat the unfairness and corruption." His supporters are going to believe anything he says.
His supporters will (I am convinced) indeed believe anything he says.
But he needs more than his supporters to win the presidency. Not everyone intending to vote for Trump blocks operates in strict confirmation bias.
I have to believe that saving half a billion dollars would be of paramount importance to Trump and he would figure that he could lie his way through the rest of it. But, who knows? Trump's campaigns have been base campaigns attempting to maximize the turnout of his core supporters. He told Nikki Haley supporters, predominantly Republicans and some independents, that they were not welcome in Trump world.
But, as you know, it is not really saving half a billion. Bankruptcy is only valuable if debt far exceeds one's ability to pay. If Trump were worth $250 million then, sure, bankruptcy might be an option if that could clear his legal debts (which neither you nor I believe is the case). But all indications suggest he is worth far more than that.
True, the primary purpose of bankruptcy is for protection if your debt exceeds your ability to pay, or to reorganize payment, depending on which chapter you file under, but Trump's true net worth is unknown. I believe that sometimes people attempt to use bankruptcy even if there isn't a huge disparity between their debt and their ability to pay.
Yes, we might be talking similarly ... see @3.1.11
We have 2 threads going covering the same topic.
Since I don't believe bankruptcy is available for judgments based on fraud and defamation, the discussion is pretty much academic.
I agree, but consider this.
Trump cannot use bankruptcy / reorganization to free himself of the legal obligation. He will still have to pay. However, he may be in such a difficult liquidity position that he might be granted reorganization. This would give him the chance to free up liquidity that would go to pay his legal obligations.
This is a very nasty situation for Trump, but at least he would be in control. Much better than having the State seize and liquidate his assets.
Really, other than the most rudimentary knowledge, including, as I stated initially, an understanding that judgments based on intentional torts such as fraud and defamation are not dischargeable, the various permutations of when and how bankruptcy may come into play is outside of my bailiwick. I've only interfaced with a bankruptcy situation in the few instances where I've received a notice of automatic stay because a defendant on a case filed for bankruptcy. I was then able to get the automatic stay lifted by agreeing to limit my client's potential recovery to the amount of the defendant's insurance policy coverage limits.
Directly responding to your comment, the judge in the civil fraud case appointed a special monitor to oversee Trump's business, so I don't know how much control Trump would maintain.
I do not know either, but I would expect Trump would have more control over the disposition of his assets during a restructuring process than if the state seized his assets.
That's probably true. I would agree.
So now he has 10 days to deliver $175 million. The game is now entirely different.
So this discussion might resume if he loses the appeal.