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      04-06-2011, 07:14 PM   #25
coh4777
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Quote:
Originally Posted by ferrari355fi View Post
Nope. He is an evil mofo. He has taken out billion dollar loans for construction projects that have gone belly up. When the bank wants their loan settled, he basically tells them no and to give him another loan. If they try to not give him another loan he threatens to not repay the first loan, which essentially will collapse the bank. So they are forced to give him another loan and hope the next project will yield enough profit to pay back both loans. Or he just files bankruptcy, and the banks get fucked.

He also saves his own ass by filing business bankruptcies, and creditors are afraid to sue him. Which leaves his personal wealth protected.
I know Trump has filed for bankruptcy several times in the past and don't really know the details, but I'm not sure how the situation you described can be right. First of all, why would a bank lend so much capital to one borrower that a default would bankrupt the bank? Unless they are idiots with no risk management practices at all, this would be impossible. Second, construction loans are collateralized by the development, so if someone were to default, the bank would just seize the asset and liquidate to recover some of their losses. This happens all the time. Again I really don't know anything about Trump's bankruptcies, so maybe you are right, but seems extremely far fetched.
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