Equity Ownership of Some Trump Operations Possible

By Norris, Floyd | THE JOURNAL RECORD, June 14, 1990 | Go to article overview

Equity Ownership of Some Trump Operations Possible


Norris, Floyd, THE JOURNAL RECORD


To understand what has gone wrong with Donald Trump's empire, one need look no further than his least successful casino - Trump's Castle.

Five years ago, the banks allowed Trump to buy the casino with less than no money down and no need to pay back any money for five years.

Not only did banks, led by Manufacturers Hanover Trust, lend him the $70 million down payment, but he was allowed to take out $20 million soon after the rest of the purchase money was raised through a $300 million issue of ``junk bonds,'' some of which effectively did not require full interest payments for years to come.

It was deals like that that enabled Trump to become overextended, and to come to believe that the banks would always be there to hand out money when it was needed.

Now, with payments due on both the junk bonds issued to buy the Castle, and on the bank loan that served as a down payment, Trump finds himself possibly having to concede equity ownership in some of his operations - which ones is not known - to keep the banks happy.

So confident was Trump that the eager bankers would keep lending that he evidently lost track of at least one loan.

Late last month - just weeks before this Friday's deadline for repaying the $70 million to Manufacturers Hanover and other banks - Trump denied in an interview that any such payment was coming up.

Shown Trump's Castle filings that detailed the loan, Trump expressed surprise, and finally responded by saying that, ``If it is, it will be extended or it will be paid.''

Details of the negotiations on that loan were not made public Monday, when Trump and his bankers reached tentative agreement on a deal to provide additional loans and suspend interest payments on others.

The banks may also get equity in some Trump operations, bankers said.

Trump bought the Castle from Hilton Hotels, which had to sell because it had been denied a license to operate a casino in New Jersey.

Under his stewardship, the results have shown a disturbing trend. Net income peaked at $3.8 million in 1986, fell to $1.7 million the following year, and dropped into the red in 1988 with a loss of $3.1 million. Last year, the Castle lost $6.7 million.

Those figures can understate the results of the casino, because they include non-cash expenses like depreciation.

But operating cash flow has shown an even sharper drop, from $33.7 million in 1988 to just $183,000 last year, when Trump was forced to lend the casino $2 million of his own money and guarantee half of a $15 million bank loan to the casino. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Equity Ownership of Some Trump Operations Possible
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.