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HomeBreaking NewsThe Illegitimate New York Lawsuit Against Trump Debunked

The Illegitimate New York Lawsuit Against Trump Debunked [Up Against the Wall]


I previously analyzed Trump’s property valuations for his NY lawsuit and found them to be undervalued compared to Trump’s own financial statement values. Likewise, the court’s valuations were also far too low as well (primarily due to his highly valuable Mar-a-logo property). And since valuations can and do change every year, even monthly, how the court or attorney general can lock down the valuations like they are is beyond me, but then we know this is an illegitimate show trial.

I have now looked at the judge’s decision to impose a nearly $350 million fine on Trump and his sons and businesses. I have to say, the convoluted ‘route’ that the judge took to justify his decision is shocking. It’s like a drunk trying to walk his way down the sidewalk, stumbling around; let’s just say that the justification was not a straight line. Interestingly, while you hear a lot about the lawsuit and the fine that was levied, you don’t hear much about the actual details, and that is because I don’t think reporters in the media either don’t understand what actually happened or don’t want you to know.

Before we start, it’s worth reminding Americans that the law requires that a lawsuit can only go forward if there are damages, i.e. someone has to be harmed, and in this case, there was no harm, no damages, and none of the banks that the attorney general claims were allegedly impacted have claimed any damages. (The proof of that is that the judgment levied (I believe) is going to the attorney general’s office or the state and not to the banks.) In fact, those banks all made money and I read that they admitted they did not rely on his financial statements to make their loan decisions. (Instead, they would have obtained independent appraisals as required by banking regulations.) So why is this case even allowed at all? Welcome to the third world.

Every company in NY should be freaked out at this – and should consider relocating to another state where they too won’t be at risk for similar persecution.

Details: First, here’s what’s important to understand: the case was about ‘ill-gotten gains’ and the fine was supposedly about disgorgement of those alleged gains, i.e. giving those gains back, but back to who? The attorney general sued 10 different Trump organizations, which is also outrageous.

Second, the attorney general chose differing dates to start the clock ticking on calculating the ‘ill-gotten gains’. For two properties, it was from the sale, for the other properties it was from when the loan started. Likewise, it appears the entire judgement of the case is based upon calculating the difference in what the attorney general perceived the interest rate should have been if Trump’s financial statement had been at a lower valuation using one proposal from a competing lender (for each property) that was 5.75% HIGHER than the lowest bidding lender.

Now everyone knows that competing bids can vary by wide amounts, yet the court took the competing bid as gospel. In essence, the court is saying that Trump should have paid an interest rate that was 5% to 5.75% (575 basis points) higher than I was borrowing at around that time when interest rates were near zero. Explain that one! So the AG is saying that a multi-billionaire should borrow at a higher rate than a guy in Middleton, Wisconsin. (Maybe she could have had more credibility if she compared his loan terms to what other billionaire developers obtained on comparable properties at the same timeframes.)

The real kicker is that the interest rates Trump received came from a whole host of different lenders on different developments at different times, which court documents show. But worse, Trump is being ordered to pay 9% on the judgment. So while he (and I) were borrowing at 2.5% to 3.5% during the time in question, the attorney general is saying that Trump should have been borrowing at 8% to 10% and in addition, paying another 9% on the full fine that was levied starting from March 4, 2019 until it’s paid! That’s another $32M x 4 years or $128 Million. It’s insane.

(The most ironic part of this case is Trump is now being punished for taking on the Old Post Office building and Ferry Point, turning around the post office when the city of New York couldn’t, and making it a success, and for that, he is now being fined, and likewise, making a go of Ferry Point.)

The basis for all this is an attorney general (upon whom the court apparently relied for the calculations) who decided what the difference in interest rates should be. Now keep in mind the attorney general has a law degree, not a degree in interest rates or in real estate development or in finance, but she is saying to the court that her expertise in setting loan interest rates is greater than that of the actual lenders who negotiated the loans and the terms! (Actual real experts in other words.)

Now here is the big ringer in the whole argument by the attorney general. She’s saying that the lenders got ripped off because they would have charged higher interest rates on the loans than they did if they had known that Trump’s net worth was (slightly) lower. That’s right, throw out the negotiating process, throw out the Trump brand and name, throw out that the lenders at that time really, really wanted to do business with Trump. Nope, none of those factors were considered. She just made up an interest rate penalty for Trump based upon an assumed lower net worth using a comparison of loan proposals that he never accepted. (Never mind she is clearly wrong on the property valuations as any first-year real estate student could calculate based upon publicly available data.)

Then there’s the period of time that the attorney general used; 2014 through 2022. We all know what happened during that period with interest rates; they were at record low levels during the period 2014 to 2021.

Different kinds of loans on different properties may have different loan terms, which means it’s pure guessing on her part. And likewise, she failed to consider that it’s standard practice for insurance company lenders to provide non-recourse loans; she made it out like the loans Trump got were non-recourse because of his financial statement, but no, every developer in the country can get a non-recourse loan on a stabilized asset.

The ruling also bans him and his sons from being officers or directors of his companies (3 years and 2 years respectively) and puts in place a court monitor, and while he could probably recruit his daughters or other trusted friends or family members to serve for him at their direction, the biggest issues for the Trump Organization is the ruling banning him from doing business with NY registered or chartered banks.

That means when property loans come up for refinancing, as they always do, he’ll have to establish new relationships with other banks to secure refinancing loans with since the NY banks that have his existing loans won’t be able to refinance them. This is like a death sentence – but instead of a quick death, it’s a slow suffocation over years.

In other words, if he is banned from doing business with those banks, what happens to the existing loans? What happens to the banks if those loans go into default because of the attorney general? Establishing new banking relationships takes time and finding banks that are large enough for him that aren’t registered in NY state will be an issue; he’ll have to go out of state or overseas to Europe. Not to mention – how many banks will now be afraid to do business with the Trump Organization? They’ll be afraid of the attorney general coming after them.

This ruling does create a nightmare for him, but of course, none of the media sources I read have said the obvious, that the ruling gets put on hold while he appeals. He’ll have to put up a bond or cash with the court. (Good luck getting that back, if he wins the appeal.) A bond will cost less and tie up less cash, so I am guessing he’ll do that. In fact, the cost for a bond may be as little as 1% of the total due, or it may be more than that, up to 10%. Still, it’s a fraction of the total judgment. (If we post a bond for road construction, it costs only 1% of the total road cost.)

This is why it will be critical for him to win the White House, where he can then issue a blanket pardon for himself, his family, and all of his supporters, not to mention everyone falsely persecuted for January 6th.

Wisconsin Right Now is a news organization focused covering the news from a conservative point of view, in particular on politics and policy issues through analysis and opinions, and is protected by the First Amendment of the United States Constitution. WRN and the columnist do not make endorsements of candidates or urge a vote for or against any candidate or issue. On October 18 and November 23, 2023, Donald Trump tweeted out on Trump’s Truth Social account T. Wall’s October 6th column on Trump’s property valuations. T. Wall holds a degree from the UW in economics and an M.S. in real estate analysis and valuation and is a real estate developer. Disclaimer: The opinions of the writer are not necessarily those of this publication or the left!


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