Short On Cash After 2016 Election, Trump Secured Secret Loan
By Dan Alexander , Forbes Staff
The last time Donald Trump won an election, he faced a cash shortage, forcing him to take out an unexpected loan. He kept the debt hidden, leaving it off his financial disclosure reports. He apparently repaid it quickly, using proceeds he received from selling his daughter's penthouse to a woman with Chinese government connections.
Forbes identified the loan, hidden for years, after scrutinizing documents and testimony from Trump's recent fraud trial, which touched on the episode so briefly that it was easy to miss what exactly happened. Trump had plenty of cash before he ran for president. In mid-2013, he listed $339 million of liquid assets on his balance sheet. Trump kept earning money but spent far more, shelling out more than $350 million to develop properties and another $66 million to run for president, burning through his cash pile. Days after he won, he committed to another big expense, agreeing to settle litigation involving Trump University for $25 million.
There was just one problem: Having torched so much money, Trump could no longer cough up $25 million with ease. Agreements with Deutsche Bank, his primary lender at the time, required Trump to maintain $50 million of liquidity, including $20 million in a Deutsche account, while he developed properties in Miami and Washington, D.C. Handing over $25 million apparently could have reduced Trump's cash total below the threshold.
The president-elect scrounged for money. In late November 2016, roughly 10 days after the settlement became public, he sold a residential lot in California to a newly created, anonymously named limited liability company for $1.5 million. A couple of weeks later, he entered a contract to sell a Trump Park Avenue apartment for $15.9 million.
Before the second sale closed, Trump's longtime moneyman, Allen Weisselberg, created an Excel file to map out Trump's liquidity situation, according to court testimony. That Dec. 29, 2016 document, later released in court, shows that Trump had about $60 million in cash and other somewhat-liquid investments, with $20 million of that locked up in the Deutsche account, another $6 million in other restricted accounts, nearly $20 million tied up in hedge fund investments, $13 million in money-market accounts and about $3 million in checking accounts.
To pay for the $25 million settlement, Weisselberg's spreadsheet laid out $3 million coming from cash accounts, $7 million from hedge fund investments, another $3 million from Trump's businesses and $12 million from a lender named Ladder Capital. The math seemed to have some holes in it: If the money from the Park Avenue apartment did not come through quickly, Trump's liquid holdings could dip below $50 million, apparently putting him at risk of a Deutsche default.
The sale of the Park Avenue apartment did end up taking a while. Donald Trump owned the unit, but Ivanka Trump had been renting it, before she and her husband Jared Kushner went to Washington, D.C. The transaction finally closed in February 2017, transferring the apartment to a woman named Angela Chen, who helmed Global Alliance Associates, a firm that helped American companies expand into China and touted its network with "the highest levels of government officials."
The Trump Organization ultimately arranged for a $25 million loan from Ladder Capital, according to an employee for the lender who worked on the deal, Jack Weisselberg, the son of Allen Weisselberg. "They were waiting for two apartment units to sell at another property, and they thought they would have closed in time for the settlement, and when they realized it could not or may not work, they just came to us," Jack Weisselberg explained in court last year. "They knew those two units were going to sell shortly, so they needed a short-term bridge loan."
Asked about Trump's financial standing at the time, Jack Weisselberg acknowledged liquidity issues. "The understanding that we had was that they had recourse obligations to another lender that limited the amount of cash that they could access," he testified. "They had to maintain a liquidity requirement, and so that was the main thing that was holding them up, as well as those two units had not sold yet."
Allen Weisselberg, when questioned about the loan during Trump's fraud trial, seemed determined to avoid getting into details. "Did I ever have a concern about breaching the liquidity requirements under a loan? I honestly – possibly," he said. "Possibly. I just don't recall exactly specifically if I did or not, but it's possible. I don't recall." Pressed about whether he remembered a short-term loan from Ladder Capital, Allen Weisselberg responded, "I recall the time that we had the apartments that we sold, they were contracted to be closed. I don't know what year it was. When you say 2017, that's certainly possible. I don't recall the year. Was there a concern about liquidity? Possibly."
Another person seemingly reluctant to reveal much about the episode: Donald Trump. Financial disclosure reports that he filed as president listed more than a dozen other loans but made no mention of a short-term one from Ladder Capital. Notably, his 2017 report also omitted a liability to Michael Cohen, whom he needed to reimburse for paying off a porn star in the waning days of the 2016 campaign. Trump could not get in trouble for failing to disclose the Ladder loan anymore—the statute of limitations on such matters lasts only five years.
Nearly eight years after all this took place, Trump, whose representatives did not respond to a request for comment, is on the ballot again, with new potential liquidity concerns on the horizon. Trump currently has about $575 million in legal liabilities, after losing the fraud case and two others. While he appeals, his balance sheet holds an estimated $410 million of cash. If he needs to gin up extra liquidity once again, he could theoretically sell shares of his new social-media business—or just get another secret loan.
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