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Donald Trump is the self-proclaimed “king of debt.” Before becoming president, he built his brand and companies with massive amounts of borrowed money.
Allmand Law teamed up with James Publishing to illustrate this timeline by Mother Jones, outlining Trump’s Bankruptcies: How Trump Leveraged Other People’s Money to Make Bankruptcy Work for Him.
In the 1980s, Trump amassed casinos, hotels, an airline, and a 282-foot mega yacht. But his gold-plated bubble popped. By June 1990, Trump was unable to make loan payments on his $3.4 billion in outstanding debts. In total, Trump businesses filed for bankruptcy six times.
In many ways, Trump’s path to bankruptcy is just like that of many other business owners. His ambition was bigger than his financial resources. Risky business decisions didn’t play out as planned. And his attempts to restructure his debt were unsuccessful. But, in classic Trump form, there are flourishes of scandal. (His father illegally tried to bail his companies out.)
So how did he rebound and rebuild? Trump, along with his bankruptcy attorneys and financial advisors, used federal bankruptcy laws to their advantage. While investors and creditors lost a lot of their money, Trump was highly compensated for his day-to-day work, earned fees during the property transfers, and slashed his personal debts.
As with everything involving Trump, his bankruptcies are polarizing. He and his supporters argue that the casino industry was perilous in the 1980s and Trump simply used bankruptcy laws to his advantage. On the other hand, some critics claim that he made reckless decisions and took advantage of investors and the small businesses that worked with him. Regardless of how you view Trump and his business practices, learn more about his bankruptcies in this timeline.
The post How Trump Leveraged Other People’s Money to Make Bankruptcy Work for Him: A Timeline appeared first on Allmand Law.
Last month, New York State Comptroller Thomas P. DiNapoli issued a report on New York City’s financial plan for FY 2018 through FY 2021. In the report, DiNapoli discusses NYC’s repeated postponement of the sale of 1,650 medallions because of the weakening market due to ride-hailing apps like Uber and Lyft, and NYC’s dubious assumption that these medallions will sell for $728,000 apiece (while an auction held on January 16th averaged about $175,000 per medallion).
A couple of observations about NYC’s financial plans with respect to medallion sales:
1. No person or entity will pay $728.000 for a NYC medallion! 2. Currently medallions are selling for approximately $185,000 per medallion and a $728,000 selling price is unobtainable.3. With the number of Uber, Via, and Lyft cars on the road, there is no need for NYC to sell additional medallions!4. In fact, maybe NYC should consider buying back existing “under water” medallions from owners whose medallions are “under water” due to Uber, Via, Lyft and NYC’s actions and inaction.5. If NYC were to sell an additional 1,650 medallions, the price of existing medallions will drop precipitously in value and will result in a further decrease of existing medallion owners’ earnings.
Filing for Chapter 13 bankruptcy as a consumer is a voluntary decision. Once a Chapter 13 case has been filed, it is also up to the debtors to dismiss the case if they so choose. Read More ›
Tags: Chapter 13, Did you Know?
It’s a little-known secret — and too infrequently exercised right of a debtor — to “redeem” a car in Chapter 7 bankruptcy, that is, take the car back from the lender at what the car is worth, not what you owe.
Yes, you heard that right: A debtor in Chapter 7 bankruptcy has a right to take his or her car back from the lender at what the car is worth.
Section 722 of the bankruptcy code gives Chapter 7 debtors the right to force the lender, who is holding as collateral personal property intended primarily for personal, family or household use (such as the family car), to fully release its lien in exchange for a lump sum payment by the debtor of the retail value of the item.
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It’s a little-known secret — and too infrequently exercised right of a debtor — to “redeem” a car in Chapter 7 bankruptcy, that is, take the car back from the lender at what the car is worth, not what you owe.
Yes, you heard that right: A debtor in Chapter 7 bankruptcy has a right to take his or her car back from the lender at what the car is worth.
Section 722 of the bankruptcy code gives Chapter 7 debtors the right to force the lender, who is holding as collateral personal property intended primarily for personal, family or household use (such as the family car), to fully release its lien in exchange for a lump sum payment by the debtor of the retail value of the item.
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BY Nino Hervias Gloria Guerra Over the past four years, the rise of Uber and other for-hire app-based car services — and the failure of New York City to properly regulate their operations — has decimated the value of taxi medallions. As medallion owners who have played by the city’s myriad rules, we have watched as upstart competitors have been allowed to operate under their own set of rules, creating the most unlevel of playing fields.
The city’s negligence has also had some grave consequences for our common quality of life. Since regulators created very few barriers to entry for these newcomers, they of course stormed, in the tens of thousands, right into the heart of the city’s central business district, helping slow traffic to a crawl.
Don’t take our word for this. Bruce Schaller, one of New York’s most reputable traffic engineers, has singled out Uber and other for-hire vehicles as the major cause of congestion in the central business district — and goes even further to call out the disrupter for undermining mass transit at the same time.
And Schaller makes perfectly clear that taxis — whose numbers, unlike Ubers, are capped by law — have played no role in this burgeoning crisis.
As a result of this Uber-inspired debacle, the city is now facing a congestion crisis so severe that Gov. Cuomo is making solving it a signature 2018 policy initiative of his administration. This week, he’s expected to reveal details of new plans to charge vehicles for traveling into the heart of Midtown.
Our fear, though, is that in looking to solve the growing problem, the state will advance policies that fail to get at the heart of the matter — and that will, in the process, further victimize medallion owners.
Even the policy advice offered by someone as sophisticated as Schaller is concerning.
In the face of his clear-eyed evaluation of how Uber has caused a traffic nightmare, Schaller beats a hasty retreat from the obvious conclusion: that Uber and its imitators need to be reined in through regulations that restrict their boundless proliferation, and that treat all of these e-hails — as the European Union is now moving to treat them — just like any other taxi company.
Instead, he suggests that Uber and Lyft self-regulate by modifying their algorithms to cut down on the cruising times of their cars in the central business district.
Meantime, even after acknowledging that taxis have not contributed to this growing mess, Schaller proposes a mandate on yellow-cab owners — already the most highly regulated group in the transportation industry — “to reduce time spent in the central business district.”
This is consistent with a false evenhandedness we now commonly hear, one that would place the same fees on both taxis and Ubers — as if both segments are now equally regulated and equally responsible for congestion.
That’s just not so.
Back in 2012, Mayor Michael Bloomberg proposed adding 2,000 new medallions for wheelchair-accessible taxis — bringing the overall medallion total to its current level of 13,587. The proposal needed both Albany’s approval and triggered a full environmental review.
Through these sales, the city hoped to generate more than $1 billion. Cuomo gave his approval and the deal went through — even though the environmental review determined that the additional cabs would create a significant negative impact on the environment.
Compare and contrast. There are now some 68,000 Uber cars total, and the city’s regulators tell us that they are licensing an additional 2,000 such cars every month — without a single environmental review.
Taxi medallion owners have paid dearly into the municipal system — and continue to pay every year with a panoply of fees, one example being the 50 cents a ride that goes directly to the MTA; Ubers are exempt from paying that fee.
Yellow cabs do so because the city said this was in exchange for the exclusive right to pick up street hails — a right that was abrogated when the regulators allowed the Ubers in with absolutely no limits.
Now that it is clear where the blame lies for Midtown’s overly clogged streets, the false equivalency between taxis and Uber is not a reasonable path forward. Whatever the city and the state decide to do about congestion must be focused exclusively on the unregulated free riders and not the already fiscally obligated medallion owners, many of them immigrants, who have been paying into the system and following the rules for 80 years.
Hervias and Guerra are taxi medallion owners and members of the Taxi Medallion Owner Driver Association.
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As our readers know, we’ve been representing many “underwater” taxi medallions (where the value of the medallion is less than the loan securing it). And unfortunately for medallion owners, based on a recent auction, no relief with respect to taxi medallions increasing in value seems to be in sight. Crain’s New York Business reportsthat an auction of seven medallions on January 16th organized by seller Aspire Federal Credit Union and Windels Marx (their law firm) never exceeded $200K per medallion. A block of five medallions was sold to the stalking–horse bidder for $875K ($175,000 per medallion) and two additional medallions sold for $189,000 and $199,000. Three years ago, these medallions sold for over $1,300,000- an approximately 90% drop in value. Jim Shenwick has represented taxi medallion clients with loans from Aspire. For information on how to manage the declining value of your taxi medallion, please contact Jim Shenwick.
Ten Things You Need to Know Before Filing Bankruptcy
Bankruptcy is a tool. Any tool can be misused which can cause you serious damage. Ask the idiot who sticks a screw driver in a live electrical socket.
YOU ARE UNIQUE: Each person has a unique situation, background and goals. Never take advice from a friend or relative because their situation will NEVER be the same as yours. After all, you would not take medicine prescribed to your friend, so why would you assume your financial and personal history is the same for bankruptcy purposes?
BANKRUPTCY FRAUD: Bankruptcy is not the same of filling out simple forms. All bankruptcy cases include at least 70 pages of information, all signed under penalty of perjury. That means if you lie, hide assets or try to defraud the court or creditors you may find your “discharge” revoked (this is your bankruptcy protection from creditors) and you referred to the Department of Justice for criminal prosecution.
MARRIED: If a married person files for bankruptcy protection their spouse is not required to file. It depends on the circumstances (length of marriage, type of debts, age, etc.) and the law of the state where you live. This is a complicated set of entwining laws and practical issues so make sure to talk to an experienced bankruptcy attorney before deciding what works for you and your spouse.
REPAYING FAMILY: In the 12 to 24 months before filing bankruptcy do not repay any loans your relatives made to you unless you are paying ALL other debts. This may be “preferential treatment” if you paid your family and did not pay your other creditors. Your family may be sued by the trustee in order to reclaim those funds. That will be a very embarrassing Thanksgiving dinner.
SELLING STUFF: Never transfer (sell, trade or gift) any of the things you own, referred to as “assets”, unless they pay you the fair market value of the asset. Otherwise, the person who got the asset may find they are forced to give the asset to the bankruptcy trustee for liquidation. This is referred to as “fraudulent conveyance”. There is a two year look back for these transactions in bankruptcy court, but may be far longer in your state (for instance, Arizona has a four year look back period).
CREDIT REPORT AND PRIVACY: Bankruptcy stays on your credit report for ten years, but it does not mean you have to wait ten years to start rebuilding your credit. Learning how to rebuild your credit will help you move toward future goals, like buying a home or vehicle. There is no privacy in bankruptcy – filing bankruptcy means that your personal situation will be open for anyone to read about.
TIMING OF FILING: Sometimes it is not the right time to file for bankruptcy. It is very important to strategize when, and if, to file. Issues such as: monies owed to you, debts you have paid, how much you earned in the last six months, are you moving and need to consider a new landlord’s impression, are you changing jobs and a bankruptcy might affect your new hire; the list goes on and on.
YOUR CAR OR HOUSE: Normally you will not lose your home or car just because you file for bankruptcy protection. It is important that you continue to pay for what ever you want to keep. But it is also important to know what the bankruptcy trustee may go after. The trustee has an obligation to liquidate (sell) those items that have value for your creditors, offset by the exemptions used in your bankruptcy.
STOP, I WANT TO GET OFF: You cannot get out of bankruptcy “just because you want to”. Never use a bankruptcy for the sole purpose of stopping a foreclosure or repossession. Depending on your unique circumstances you are going to lose your home or car anyway, but now you will have a bankruptcy on your records. Filing bankruptcy is like jumping off a cliff. Halfway down you cannot decide to go back to the top of the cliff (that is not how gravity works). Checking for rocks or sharks before jumping is good planning. Do the same before filing a bankruptcy.
WHY DID YOU FILE BANKRUPTCY? It is very rare for anyone (other than your attorney or mother) to ask why you are filing for bankruptcy protection. Everyone involved in the bankruptcy system assumes you would not file for bankruptcy unless you need to. Besides that, your situation is never as bad as what others are suffering through.
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About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. As a teacher and retired law professor, Diane believes in offering everyone, not just her clients, advice about the Arizona bankruptcy and foreclosure laws. She is also a mentor to hundreds of Arizona attorneys. 
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Ten Things You Need to Know Before Filing Bankruptcy appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
As we’ve been writing about and problem solving in our practice, ride–hailing apps like Uberand Lyft are continuing to negatively impact taxi trips, revenue and “underwater” medallion owners. And now these apps are leading to declines at one of taxis’ last strongholds-New York City airports. The Wall Street Journal reportson a new analysis of Taxi and Limousine Commission data by Bruce Schaller, which found that “taxis’ share of pickups compared with app-based services at the airports has fallen from almost 100% in [June 2013] to 58% at LaGuardia and 53% at JFK [in June 2018],” even as demand for airport transportation grew.
Unfortunately, this is further unwelcome news for taxi medallion owners and will continue to suppress or reduce the value of NYC taxi medallions and compound the problem for owners of “underwater taxi medallions” (medallions whose value is less than the bank debt secured by those medallions). Owners of underwater taxi medallions are encouraged to speak with and meet Jim Shenwick.
Our law firm specializes in representing taxi medallion owners whose medallions are “underwater” (meaning that the loan secured and collateralized by the medallion is greater than the value of the medallion) in workouts with banks and creditors and in bankruptcy filings. We have noticed a trend recently where many medallion owners who own underwater taxi medallions have transferred their house or primary residence to a trust for no money or other consideration for the transfer. There appear to be two reasons for these transfers or conveyances: (1) estate planning (where the owner of the house wants future appreciation of the property to benefit a family member or third party); or (2) the property owner (who also owns the underwater medallion) believes that by conveying the house to a trust, he or she is putting the house outside of the reach of the bank or creditor, who will not be able to foreclose on the house if there is a default on the medallion loan and litigation.
In our experience, after meeting with and speaking to many medallion owner clients, we have determined that most of these transfers are not done for estate planning purposes, but to put the family house outside of the reach of the bank or other creditors (the second reason).
A couple of observations need to be made with respect to the transfer of a house to a trust from a debtor/creditor and/or bankruptcy perspective. If an individual borrows money from a bank, and their liabilities (monies owed to third parties) exceed their assets (property which they own), which is generally the fact pattern for an individual who wants an underwater taxi medallion, the transfer of the family house to a trust for no consideration (money or property) is a fraudulent conveyance. The statute of limitations (or look back period) is six years under the New York State Civil Practice Law and Rules and two years under the Bankruptcy Code. In a fraudulent conveyance action, the bank or other creditor can commence an action in New York State courts to reverse the conveyance of the family house from the trust back to the individual, and there are many reported cases where creditors have commenced these actions and prevailed (seeUnited States v. Evseroff). Accordingly, a homeowner who makes this type of the transfer may have incurred legal fees and paid real estate transfer taxes and fees to accomplish nothing from a workout or bankruptcy perspective!
In fact, besides accomplishing nothing and incurring legal fees and real estate transfer taxes and fees, the medallion owner/homeowner may actually end up in a worse position than the medallion owner that did not make the transfer, for two reasons: (1) if the trust owns a house and not an individual (who owns the underwater medallion), then the individual cannot claim the New York State homestead exemption which is currently $165,550 per spouse ($331,100 for a married couple) in the New York metropolitan area; and (2) a creditor may object to the discharge of their debt because of the fraudulent conveyance of the house to the trust (see Husky Int’l Elecs., Inc. v. Ritz).
The New York State homestead exemption provides protection to New York State residents, to wit the first $165,550 in equity in a primary residence, after the payment or satisfaction of a consensual mortgage, is property of or belongs to the homeowner and is not subject to the reach of a creditor or a bank. Additionally, the Bankruptcy Code provides that if a debtor made a fraudulent conveyance transfer prior to the date of the bankruptcy filing, this may be grounds to dismiss their bankruptcy case or deny them a discharge of certain debts.
While there are techniques and approaches to undo or mitigate the damage done by these transfers or conveyances, it is better to not do them in the first place. We have however represented many individuals in mitigating the effects of these types of transfers.Prior to engaging in a workout with a bank or creditor, an individual or a debtor should and can engage in “asset protection planning” under New York State and federal bankruptcy law, but fraudulently conveying the family house to a trust to put the house outside of the reach of a creditor or a bank, does not work and is not valid asset protection planning.
Our experience has shown that nervous or stressed out homeowners who own underwater taxi medallions may be doing themselves more harm than good by hastily conveying their house or other valuable assets to trusts or third parties for no consideration. We would advise medallion owners to consult with competent, experienced attorneys or lawyers before engaging in such actions. In fact, engaging in correct and meaningful asset protection planning can often times result in a successful workout with a bank or a successful discharge of debt in a bankruptcy filing.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.