Debt cloud hangs over Trump post-presidency

Source: The Hill | January 17, 2021 | Sylvan Lane

President Trump faces an increasingly challenging financial future after he leaves the White House on Wednesday.

Trump is on the hook for hundreds of millions of dollars of debt, most of it due within the next four years, and the legacy of his presidency may leave him with few options to pay it off.

In the wake of the Capitol riots, the New York City government and the PGA of America backed away from business arrangements with the Trump Organization, sapping future income from the debt-laden president. Three banks have announced they’re cutting ties with him — including Deutsche Bank, his biggest creditor — limiting his ability to refinance debt.

“It strikes me that the president is going through a collapse of his financial goodwill,” said John Pottow, a commercial law professor at the University of Michigan.

“There’s a bunch of corporate actors who are running away from him, like Deutsche Bank, so I think the last thing they want to do is to refinance him,” Pottow added.

If more banks deem Trump a toxic client, he could face daunting obstacles in navigating his debt.

Trump owes creditors at least $315 million, mainly through mortgages for Trump Organization hotels, resorts and golf courses, according to his 2020 financial disclosure. A Forbes analysis of Trump’s finances, however, found that Trump likely owes at least $1 billion to creditors, some of which he has personally guaranteed.

“Debt he’s personally guaranteed means that those lenders can get access to all the equity he owns in all of his other companies,” said J.W. Verret, a financial law professor at George Mason University and former House Republican aide who supported President-elect Joe Biden’s campaign.

“His personal wealth can take a hit,” Verret added.

Trump still holds considerable wealth through his business and claimed to have at least $1.4 billion in assets in last year’s financial disclosure, a self-reported document that is not audited by the federal government. Just $5.8 million of his holdings appear to be in cash or other assets Trump could quickly liquidate in a crunch, according to an analysis by The Hill.

A full picture of Trump’s financial health is impossible to assemble without the tax returns and other financial documents he has refused to release for years. Even so, experts say that based on what is known about his wealth and obligations, the president could face a barrage of lawsuits and collection attempts that could ultimately lead to personal bankruptcy.

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