Saturday, January 23, 2016

Lousy at Business, Lousy at Threats

Donald Trump doesn't like the story about how he demonized "junk bonds" then turned right around and used them to finance one of the worst business deals of his life (it went bust).  He threatened to sue a reporter if he wrote it-- but of course, that didn't work.

According to the Wapo story, Trump testified before the Casino Control Commission in February 1988 to get permission to take over completion of the gargantuan Taj Mahal casino project in Atlantic City, New Jersey. He told the commission he didn’t need junk bonds to finance the venture because banks were practically throwing money at him.

Trump received the approvals he needed for the Taj, but the prime-rate loans never materialized. Determined to move forward, he turned to the very junk bonds he had derided in the hearing. He agreed to pay the bond lenders 14 percent interest, roughly 50 percent more than he had projected.

Six months after its grand opening in April 1990 as the largest casino-hotel in the world, Trump started defaulting on his payments. By July 1991, the Taj went belly up, filing for bankruptcy. 

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