Bankrupt Billionaire

The following is an excellent excerpt from the book “THE LOST TYCOON: “The Many Lives of Donald J. Trump” by Harry Hurt III from Part Three: “Best Sex Ever Had” from Chapter 10: “Bankrupt Billionaire” on page 314 and I quote: “On Monday, April 30, 1990, Donald J. Trump strides into his office in Trump Tower, plops behind his red-lacquered gull-tinged desk, and picks up the latest edition of Forbes magazine.  His photograph is on the magazine’s cover.  But he does not like the banner headline plastered across his face.


The answer, according to Forbes, is a lot less than Donald claims and a lot less than just about everybody else believes.  Back in October 1989, Forbes ranked Donald number nineteen on its list of the four hundred richest Americans with an estimated net worth of $1.3 billion.  But in light of a recent inquiry into his financial situation, Forbes says, Donald is actually worth less than half the magazine’s previously published figure.

“If our estimates are substantially correct–and we think they are generous–Donald Trump’s current net worth is about $500 million,” Forbes declares.  “Does Donald Trump command an impressive pile of assets?  Yes.  Do his assets exceed his debts by a comfortable margin?  That’s a different question.”

Forbes claims Donald suffers from the very sort of cash squeeze he has denied in the Wall Street Journal with the threat of a libel suit.  Though his assets may be worth as much as $3.7 million, the magazine says, he carries $3.2 billion in bank and bond debt.  According to Forbes, the interest payments on his bank debt alone amount to $180 million a year, but the cash flow from his airline, real estate, and Plaza and Castle casino properties yields is only $140 million  a year.  “That leaves Trump bleeding,” the magazine notes, “at a rate of at least $40 million a year, $3 million a month, $770,000 a day.”

The Forbes article sends a chill through the hearts of Donald’s creditors.  Incredibly, there has never been a complete and comprehensive independent audit of Donald’s wealth.  All the people who have been lending him money, from pinstripe-suited institutional executives to silver-haired casino bondholders, have been relying on not much more than his word and stacks of Trump Organization paper.  Over the next several trading days the prices of Trump casino bonds fall as low as 65 cents on the dollar, representing a loss of over $350 million in market value.  Behind the scenes a phalanx of nervous and numbstruck Trump bankers starts worrying that its multibillion portfolios of loans may be in danger of default.

Forbes has been after me for years, consistently after me,” Donald rages during a May 3 appearance on ABC’s “Prime Time Live” with co-anchor Sam Donaldson.  “They took properties and devalued the properties.  They say the Plaza Hotel is not worth what everybody knows it’s worth. . . .  They include the debts of the Taj Mahal but not the income . . . . The same writer who wrote this story wrote a story for Forbes a year and a half ago.  He wrote a story that Donald Trump lost to Merv Griffin.  He got it wrong.  Business Week got it right. . . . And for good reason, the [Forbes] have a vendetta.  It makes no difference.  So they say I’m worth five hundred million dollars.  They say I’m worth whatever–it makes no difference.  It just shows how inadequate their surveys are.”

“Why would Forbes be out to get you?” Donaldson asks, noting that it is “a respected business publication.”

I know why, but it’s going to be in my next book,” Donald sniffs.  “I mean, I–I can tell you why, but I’m not going to tell you now; I’m going to save it for the book.  There’s a very specific reason why, but I’m saving it for the book.”

Donald then claims he will embarrass the prophets of his impending doom by accepting still-undisclosed offers to buy some of his most fabled trophy properties.  “I will sell the Trump Princess for one hundred and fifty million,” he predicts.  In the next breath, however, he suddenly reduces the projected sales price of the yacht to $115 million, promising that whatever the final figure turns out to be, “The boat will be sold shortly for a lot of money.”

Donaldson returns to the key question raised by the recent Forbes cover story: How much is Donald Trump really worth?

“I have absolutely no idea,” Donald claims at first.

“You mean . . . Chase Manhattan banks have lent you money and you say to them, ‘Look, I don’t know what I’m worth, but I would like a hundred million dollars’?” Donaldson asks incredulously.

“Of course, I know what I’m worth,” Donald counters.  “I don’t know what the Plaza’s worth.  It depends on what somebody would pay for it.  But it’s worth a hell of a lot more than this character Richard Stern [of Forbes] gives me credit for.”

“Do the banks know what you’re worth?” Donaldson asks.

“Nobody know what I’m worth,” Donald insists, “because you can’t value certain properties.”  He nevertheless goes on to say, “right now, I’m worth more than I ever was.”

But Donald is stunned to discover that he can no longer keep fooling the financial media.  A few day later the Wall Street Journal reports that the Trump Shuttle has suffered cumulative losses of $85 million since the day Donald bought it from Texas Air.  Potential buyers of the airline abruptly back off.  Then a rumored deal to sell the Trump Princess falls through.  By mid-May the members off the Friars Club, a fun-loving national fraternity of skeptics, start laying bets on the most likely date Donald Trump will file for bankruptcy.

“Everyone’s heard tales about how poor D. T. is leveraged out, how even his Taj is up for grabs because he needs money.  Bullbleep,” Adams writes in her column of May 22.  Alluding to the Forbes cover story without mentioning it by name, she declares that Donald is hardly down to his last half billion dollars.  “How these august respectable financial journals overlooked certain hidden pockets in Donald’s wallet, I haven’t the foggiest. . . . This guy is sitting on 4 billion.  Cash.  Billion with a ‘b.’  In terms of liquid assets, he could pour out maybe 5 billion. . . . The closest thing we’ve had to a semi-genius since Mme. Curie, Donald has determined that, financially speaking, it’s bye-bye for the East, so he’s moving his toys West.  Maybe he’ll buy a studio.  Maybe he’ll get Marla a job.  And that–and only that is why he’s divesting.  So he can raise a few bobs to invest in the Sun Belt.”

Two days later rival New York Daily News columnist Liz Smith jumps on the Trump-is-still-a-billionaire bandwagon.  “My own investigations prove Cindy is right on the button,” Smith solemnly reports.  “So why wasn’t this on the front page? What I might add is the following.  Maybe Donald is beginning to get the feeling that he has damaged himself in New York City.  And as he always needs new heights to conquer, California sounds just perfect.  (He is already putting up the tallest building ever in L.A. on the site of the old Ambassador Hotel.)”

Donald is quickly reminded of the importance of maintaining his bluff when he flies down to Atlantic City with Adnan Khashoggi to witness the return of Japanese high roller Akio Kashiwagi to the baccarat tables at Trump Plaza.  Trump consultant Jess Marcum, a mathematical probabilities expert who co-founded the RAND Corporation, has suggested an enticing proposition that may help Trump Plaza recover the $6 million Kashiwagi won back in February.  In gambling parlance, it is called a freeze-out.  The rules stipulate that Kashiwagi will start with a stake of $6 million to be wagered on baccarat at $200,000 a hand.  The game will not end until he either loses the $6 million or doubles his stake to $12 million.  Marcum has calculated that the odds are five to one that Kashiwagi will lose his $6 million before doubling it.

But when Donald appears on the Trump Plaza casino floor to greet Kashiwagi, he watches in horror as the Japanese high roller wins a series of $200,000 hands.  Donald paces about the baccarat tables for a quarter of an hour, impolitely “sweating in action” in view of Kashiwagi and the other patrons, then excuses himself.  A few short hours later he learns that Kashiwagi is $6.8 million ahead.  Donald orders Marcum to stop the game, an act that would constitute an unforgivable breach of gaming etiquette.  “Be patient,” Marcum urges, noting that Kashiwagi “wants to keep playing and soon the [probability] wave will run the other way.”

Marcum is right.  The game continues for more than five days.  By the end of day six Kashiwagi has lost $6 million in cash and $4 million on credit, a total of $10 million.  He now wants Trump Plaza to provide him with another $4 million worth of chips on credit so he can keep gambling.  Trump gaming division chief Ed Tracy refuses.  Donald later suggests that Kashiwagi return on December 7, 1990, the anniversary of the Japanese attack on Pearl Harbor.  Charging that their host lacks honor, Kashiwagi and Yong, his translator, climb into a limousine and leave Trump Plaza for Caesar’s Palace.  They have no intention of paying back the $4 million Kashiwagi has already received on credit.  As for Kashiwagi’s autographed copy of Trump: The Art of the Deal, Yong announces that they “plan to burn it soon.”

Some eighteen months later, during the weeklong Japanese celebration of New Year 1992, Kashiwagi is hacked to death with a samurai sword in the kitchen of Kashiwagi Palace.  The ritual form of the murder suggests the unseen hand of the Japanese mob.  Kashiwagi dies owing Trump Plaza a total of $6 million on paper, most of it in markers for gambling credit.  In cash terms, Donald will be out about $1 million in his dealings with Kashiwagi, most of it in the form of hospitality expenses and chips redeemed at the casino cage for cash before Kashiwagi’s final departure.  As unusual, Trump casino consultant Al Glasgow will offer an arch epitaph: “See what happens when you don’t pay your markers.”

On the morning of Wednesday, May 23, Marla Maples sashays into the Four Seasons restaurant with her lips parted in a coy smile.  She is holding a press conference to announce that she has had a change of heart.  She has decided to accept a deal with No Excuses after all.  She will be the official representative of the blue jeans-manufacturing company with a reputation for appealing to “bad girls.”  The contract will reportedly pay her in excess of $500,000.

“Hi.”  Marla giggles as some fifty photographers rush to snap her picture.  “You all look familiar.  Te-hee.”

Lest anyone mistakenly lump her in the same category as former No Excuses representative Donna Rice, the femme fatale linked to former presidential candidate Gary Hart, Marla announces that she will be donating $25,000, or roughly 5 percent of her No Excuses contract, to an environmental organization called the Better World Society.  She will also have creative control over the advertising spots filmed for No Excuses, which, at her behest, will have an environmental theme.

“I feel that as a whole,” Marla proclaims, “It is time for us to pull together in a positive way to help make people all across our planet aware of the greater issues that are affecting our world today and which may be affecting our everyday existence in the very near future if we don’t acknowledge the situation and do our part.”

Most of the assembled media naturally focus their follow-up questions on Marla’s relationship with Donald Trump.

“Did Donald ever moan, ‘Oh Ivana’?” one of the reporters shouts.

“That’s not a fair question.”  Marla smiles.

“Are you and Donald still together?” someone else wants to know.

“I can’t comment on that,” Marla replies, but admits that Donald has been “absolutely supportive” of her decision to accept the No Excuses contract.  She does not reveal that he will also receive 30 percent of the proceeds under his secret contract with her.

Only the New York Daily News bothers to ask about her environmental concerns.  “Pollution really worries me,” Marla declares.  “I love the ocean.”

Moments after the press conference has concluded, Marla discovers that she has more to worry about than oil spills and toxic waste.  A process server dispatched by Ivana’s attorney, Michael Kennedy, shows up at the Four Seasons.  He hands her a subpoena to give a deposition in the case of Trump v. Trump.

Donald quickly hires attorney Gerald Shargel, who is known for defending alleged mob figures, to represent Marla.  As it turns out, Marla is never actually required to give a deposition; the supoena is merely a Kennedy feint designed to mislead Donald’s attorneys about his legal strategy.  But Shargel reportedly sends Marla a bill for $10,000, which Donald advises her not to pay.

On Sunday, May 26, Ivana Trump leaves New York for Czechoslovakia.  She is accompanied by her father, Milos Zelnicek, and her son Donny, who plans to go fishing with his maternal grandfather.  The Donald has not seen his wife or his children for the past three weeks.  Donny, who is deeply distressed by his parents’ breakup, refuses even to speak to his father.

Ivana cannot help recalling, however, that the last time she had spoken with The Donald, he had posed a very curious question.

“Will you still love me,” he asked her, “when I don’t have any money?”

“Yes,” Ivana had replied.  “I already did love you when you didn’t have any money.  Remember?”

By the time Ivana returns to New York, she will finally get an inkling of why The Donald asked her such a question.”


HARRY HURT III is the author of Texas Rich, a best-selling biography of the H. L. Hunt family.  A contributing editor of Texas Monthly, and a former correspondent for Newsweek, he lives in Houston, Texas, and Sag Harbor, New York.”

LaVern Isely, Progressive, Overtaxed, Independent Middle Class Taxpayer and Public Citizen Member and USAF Veteran


About tim074

I'm a retired dairy farmer that was a member of the National Farmer's Organization (NFO). Before going farming, I spent 4 years in the United States Air Force where I saved up enough money to get my down payment to go farming. I also enjoy writing and reading biographies and I write about myself as well as articles and excerpts I find interesting. I'm specifically interested in finances, particularly in the banking industry because if it wasn't for help from my local Community Bank, I never could have started farming which I was successful at. So, I'm real interested in the Small Business Administration and I know they are the ones creating jobs. I have been a member of Common Cause and am now a member of Public Citizen as well as AARP. I have, in the past, written over 150 articles on the Obama Blog ( and I'd like to tie these two sites together. I'm also on Twitter, MySpace and Facebook and find these outlets terrifically interesting particularly what many of these people did concerning the uprising in the Arab world. I believe this is a smaller world than we think it is and my goal is to try to bring people together to live in peace because management needs labor like labor needs management. Up to now, that hasn't been so easy to find.
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