Trump Had Over $270 Million In Debt Forgiven From Chicago Hotel Financial Struggles
President Donald Trump has had over $270 million in debt forgiven since 2010, the New York Times reported Tuesday.
The report is based on an analysis of his tax records, which show that when Trump International Hotel & Tower in Chicago struggled financially, his lenders granted him extra time to pay off his debt, though much of it ended up being forgiven.
In response to the Times article, Trump tweeted: “I was able to make an appropriately great deal with the numerous lenders on a large and very beautiful tower. Doesn’t that make me a smart guy rather than a bad guy?”
As a developer long ago, and continuing to this day, the politicians ran Chicago into the ground. I was able to make an appropriately great deal with the numerous lenders on a large and very beautiful tower. Doesn’t that make me a smart guy rather than a bad guy?
— Donald J. Trump (@realDonaldTrump) October 28, 2020
The Times reported that two of Trump’s LLCs borrowed over $700 million for the project, the bulk of which ($640 million) came from Deutsche Bank.
However, there were construction delays and Trump could not immediately repay the bank, so they granted an extension. They denied his request for a second extension, however, which prompted Trump to sue the entity, along with a second lender, Fortress Investment Group, and other banks and hedge funds that had bought parts of the project’s loans.
Trump reportedly accused Deutsche Bank of “predatory lending practices,” which prompted the bank to file a lawsuit of its own against Trump to collect payment. The bank, Fortress and Trump settled in July 2010, and while the terms of the settlement were not publicly disclosed, it can be seen in the records the paper obtained that the president had about $270 million in debt from the project forgiven.
Generally, forgiven loans would be taxed heavily, but Trump appears not to have any tax on them at all — likely because of how poorly his other businesses were faring.
Trump Organization chief legal officer Alan Garten told the Times that Trump had abided by tax lawes and paid all the necessary taxes on the debt.
“These were all arm’s length transactions that were voluntarily entered into between sophisticated parties many years ago in the aftermath of the 2008 global financial crisis and the resulting collapse of the real estate markets,” he said.