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Sussing the Trump Estate Sale

donald trump
Trump could come up with the money, as painful as it would be for him—and as fun as it would be for various distressed-investing types. Photo: Joe Raedle/Getty Images
William D. Cohan
February 21, 2024

Like many on Wall Street, I’ve been left wondering how Donald Trump will be able to afford the more than $450 million penalty, including interest, that Judge Arthur Engoron imposed on him last week as a result of the civil fraud lawsuit brought by New York State Attorney General Letitia James as well as the $83.3 million he owes E. Jean Carroll after he lost two defamation cases she brought against him. Assuming that at some point he loses all his appeals, can he get the cash he needs to pay his debts? Is he liquid enough for the appeal bond in the meantime? Will he be able to find someone to post the bond and take the risk of his credit? And that ignores, for the moment, the increasing possibility that he might also have to pay the I.R.S. $100 million or so in back taxes, as a result of his improper deductions over the years. 

The challenge of forking over $530 million, or so, recalls for me the billions Trump’s various real estate and casino companies failed to repay to creditors back in the 1980s and 1990s, forcing some five or six of those companies to file for bankruptcy protection. As Trump is the first to point out, he himself has never filed for bankruptcy, even if the various corporate entities he once controlled have. Will the current round of legal setbacks force Trump into personal bankruptcy for the first time, as the high-octane investigative reporter and Pulitzer-prize winner David Cay Johnston has suggested?

It’s not likely, as enjoyable as that event might be for many. In 2015, credibly or not, Trump pegged his net worth at $10 billion, and then at $11 billion—although a material part of that calculus was based on the $4 billion-ish value he put on his “brand,” which of course is highly subjective, as even he admits. More recently, Forbes pegged his net worth at $2.5 billion. (Trump said in his April 2023 deposition in the civil fraud lawsuit that Forbes is “owned by the Chinese” with “their own agenda.” It’s actually owned by a Hong Kong-based investment firm, Integrated Whale Media, but whatever.) 

Anyway, it’s probably safe to say that if Trump ends up having to pay some $530 million in fines and interest, he could come up with the money, as painful as it would be for him and as fun as it would be for various distressed-investing types to prey on his tough luck by paying him the bare minimum for the assets he would be forced to sell. But that April 2023 deposition is the most fascinating distillation of Trump’s assets, and it probably offers the best sense of what he will have to either sell or hock further to get out from under the massive financial penalty that James is determined to collect.

The Garage Sale  

In the deposition, Trump claimed to have about $400 million in cash. “Which is a lot for a developer,” he added. “Developers usually don’t have cash. They have assets, not cash. We have, I believe, $400 [million] plus and going up very substantially every month. My biggest expense is probably legal fees, unfortunately. That’s okay.” Presumably, the only person who could verify Trump’s claim about his cash hoard is Barbara Jones, the court-appointed monitor of the Trump Organization. 

He then moved on to itemize his “very salable assets”—his “glamour assets because I never liked non-glamour assets”—including Trump Tower, 40 Wall Street, Mar-a-Lago, Bedminister, the Turnberry Golf Club and property in Scotland, and Seven Springs, an estate in Westchester County. “There would be people that would do anything to own Doral,” he said, referring to his golf course in Miami. “There are people that would do anything to own Turnberry or Mar-a-Lago and Fifth Trump Tower or 40 Wall Street.” He said he paid $8 million for Mar-a-Lago, in 1985, and that now it is worth $1.5 billion—and “maybe more than that”—even though he signed a deed restriction that prevents the historic landmark from being anything other than a “private social club,” which severely curtails his development rights. (According to Engoron’s September 2023 ruling—where he initially determined that Trump had committed fraud—the Palm Beach County assessor appraised Mar-a-Lago at between $18 million and $28 million, as of 2021, although that seems low.)

Trump’s hyperbole is no surprise. His financial statements value 40 Wall Street, a fading office tower in the heart of New York City’s former financial district, and where he has a long-term ground lease but does not own the building, at $530 million. A bank appraisal, done by Cushman & Wakefield, pegged its value at $220 million. It also has a $90 million or so mortgage on it, provided by Ladder Capital, which also financed Trump Tower. In 2022, Trump refinanced Trump Tower with a $100 million mortgage from Axos Bank, in San Diego, run by a former Goldman Sachs banker who is reportedly a Trump supporter. In his deposition, Trump said he did not know how that value of 40 Wall Street was derived but that he thinks it’s worth more than $530 million now. He said he believed the building was “fully rented,” or nearly so. 

Trump compared Seven Springs, the estate in Westchester County that was once owned by Eugene Meyer—the Lazard banker who bought The Washington Post out of bankruptcy once upon a time—to Mar-a-Lago. Trump reiterated that if New York City ever got its “act together” again, Seven Springs is “the most incredible place” and “has a great value.” He put a value on it of $291 million. “I think it’s the greatest house in New York State in a phenomenal location, in the Bedford area, which is, you know, the highest-income area,” he said. In his ruling, Engoron noted that a 2016 appraisal of Seven Springs put the value at $57 million. 

Then there is, of course, the infamous Trump Tower triplex that Trump claimed was 30,000 square feet when it was actually just under 11,000 square feet. He also valued the apartment at as much as $207 million. In his April 2023 deposition, he said it could be worth even more. He also said that a value for the triplex at around $116 million was “very doable” but “I think that price is now low. An apartment just sold for $250 million on Central Park South. And I believe this is, you know—I don’t know, sort of say—it’s a better location. It’s Fifth Avenue.”

You get the idea. He has cash, but whether it’s as much as $400 million is unknown. He has assets that he can sell that collectively are certainly worth more than $530 million, even if he wishes they were worth much more. He’s also a 30 percent minority investor in two Vornado Realty Trust-owned office towers—one at 1290 Avenue of the Americas, in Manhattan, and one at 555 California Avenue, in San Francisco—but he has no ability to use or withdraw funds from the partnership or to force the sale of the properties. (Also, that would be an unwise divestiture given the challenges facing office towers in San Francisco and, to a lesser degree, parts of Midtown.) 

Naturally, Trump believes that his brand enhances the value of everything he owns and wants to sell by virtue of the fact that he owns it and is selling it. (A recent data point: Trump’s limited-edition “Never Surrender” sneakers sold out on Saturday, at $399 per pair. According to Darren Rovell, they’re now selling for an average price of over $3,000 on eBay. The record-high sale is $7,500…) In any event, when he last had his “brand” valued many years ago, the professional who did it, Jonathan Low, pegged it at between $2.8 billion and $3 billion. “The brand is worth a lot more than it was then,” Trump said in the April 2023 deposition. 

The Scary Truth

Ironically, Trump’s most valuable and easily salable asset these days may be Truth Social, his fledgling media company that is on the verge of consummating its long-awaited merger with Digital World Acquisition Corp., a special purpose acquisition corporation, or SPAC. If the merger occurs, after an upcoming shareholder vote following the Securities and Exchange Commission’s approval of the combination, Trump will own more than 78 million shares of DWAC, worth nearly $4 billion these days, even though during the first nine months of 2023 Truth Social generated revenue of $3.4 million and lost nearly $50 million. In other words, like the rest of the Trump empire, Trump’s stake in Truth Social/DWAC is dramatically overvalued but will likely be salable, at some point, at some price. 

As part of the merger agreement, Trump agreed to a six-month lock-up on the sale of any DWAC shares he receives after the merger closes. But by the time he exhausts all his appeals on the recent Engoron and Carroll defamation rulings, he could probably sell shares in the SPAC and be able to cover what he owes. In other words, as usual, he’ll likely be able to slither away without a whole lot of pain, given the bonanza of the now fully discredited SPAC phenomenon.

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