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Lack of money due to coronavirus : Trump's family business asks Deutsche Bank for financial help
Because of the coronavirus crisis, many companies in the USA are also getting into financial difficulties. Large and small companies across the country are trying to find solutions with business partners, landlords and lenders that will give them some breathing space.
According to a report in the "New York Times", this also includes the family business of US President Donald Trump.
As some of the hotels and golf courses have been closed due to the current situation, the Trump company has investigated whether it could delay payments for some of its loans and other financial obligations, reports the NYT, which cites insiders and documents that it has checked .
According to this, representatives of the Trump company recently spoke with Deutsche Bank, the president's largest creditor, about the possibility of deferring payments for at least some of its loans from the bank.
Trump's company wants to postpone lease because of corona virus
And in Florida, the Trump company asked the Palm Beach district whether the company was expected to continue making monthly payments for land it leased for a 27-hole Trump International Golf Club planned there.
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Florida's Governor Ron DeSantis had restaurants, bars and golf courses closed last month, as the corona virus had spread to the state.
Nobody knows how much money Trump has. Even as president, Trump continues to try to earn as much as possible. Although he waived his state salary ($ 400,000) and ceded management to his sons, he remained the owner.
His holding, a conglomerate called The Trump Organization, does not publish any figures and keeps his tax returns secret.
Trump is the first president in 50 years to refuse to publish his papers. It is usually common practice for presidential candidates to provide voters with an insight into their finances through their tax returns. A decision is now to be made by the Supreme Court; when that will be is likely to be uncertain in times of the corona virus.
According to the NYT, the Trump Organization's talks with Deutsche Bank and the Palm Beach District are ongoing. It is unclear whether the Trump company will be allowed to suspend or reduce payments, the paper writes. As the "Handelsblatt" reports, Deutsche Bank declines to comment.
The NYT quotes Eric Trump, the president's son, as saying, "Everyone is working together these days." Eric Trump, who co-runs the family business, said: "The tenants work with the landlords, the landlords with the banks. The whole world is working together as we fight this pandemic." The Trump company has more than a dozen golf clubs and luxury hotels in the US and around the world.
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The paper goes on to say that the inquiries would put lenders and landlords in the uncomfortable position of either having to support Trump - or taking the risk of alienating the president.
In the past few weeks, the company has temporarily closed its hotel overlooking the Las Vegas Strip due to the corona virus, reduced staff and services at its hotels in New York and Washington and largely closed its golf clubs in Florida and New Jersey, writes the NYT.
The Mar-a-Lago Club in Florida, which at this time of year normally serves as the "Winter White House", as Trump likes to call it, was also closed.
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According to the NYT, other companies could potentially draw on a $ 500 billion bailout fund administered by the Treasury Department. But the economic rescue package that President Trump signed last week has denied aid to the president and his family.
As the NYT writes, Deutsche Bank has lent Trump and his companies about $ 2 billion since 1998. The bank is the only major financial institution willing to do business with the Trumps.
By the time he became president, the Trump company owed Deutsche Bank about $ 350 million, according to the report, including loans to buy and renovate the Doral Golf Resort near Miami and to develop a luxury hotel in the building of the Old Post Office in Washington.
Background to the coronavirus:
Both projects are suffering from the economic standstill, according to the NYT. In response to the regulations of the Miami-Dade district, the Doral Resort has ceased operations, while the hotel in Washington continues to operate, albeit with few guests and with the restaurant and bar closed.
Trump's company leased the Washington property from the federal government; and the company has obtained offers from potential buyers. This process is now on hold, the paper writes, citing the Washington Post.
Trump's company received the loans for these properties as well as one related to his Chicago skyscraper from 2012 to 2015, according to the NYT.
Due to a number of defaults and bankruptcies of Trump's companies, Deutsche Bank insisted that Donald Trump provide personal guarantees for these loans. This means that the bank can fall back on his personal assets if he should stop repaying the money.
According to bank officials, since Trump's election, Deutsche Bank executives have been racking their brains over what to do in the event of default, the report said.
Seizure of the President's personal property would be an unattractive proposition. But the decision not to collect the funds would be tantamount to an enormous financial gift to Trump, whose administration wields tremendous power over the bank, according to the NYT.
Deutsche Bank's operations in the United States are overseen by federal regulators and the Justice Department has conducted a criminal investigation into the bank.
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