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      04-06-2011, 07:17 PM   #26
nnnnnnnnnnnnnnnnnnnnnn
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Quote:
Originally Posted by coh4777 View Post
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.
Because he is Donald Trump. Imagine the doors it opens by capitalizing one of his successful projects.

Let's say the bank does seize the assets on one of the projects. With so much riding on marketing his name on the final project, don't you think the bank would just see it as another heap of rubble without the name Trump?
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