December 3, 2008 - Donald Trump, New York NY

Is Trump in Trouble Again?

The billionaire everyone loves to hate is coming under financial pressure.

Is Donald Trump in Trouble Again?

The billionaire everyone loves to hate is coming under financial pressure.

An article in the Independent lists the woes:

DUBAI–The Trump Organization and its partners are halting work on the Trump International Hotel & Tower, a 62-story steel and glass colossus slated for a palm tree-shaped island off Dubai. Mr. Trump had claimed one of the penthouse suites. But demand has collapsed, so state-owned Dubai real-estate developer Nakheel suspended the $790-million project.

CASINOS–Trump Entertainment Resorts, his publicly traded casino business, failed this week to make a scheduled $53 million loan payment while it tries to work out new terms with its lenders. The company’s shares are trading at 25 cents and the company has been in talks with bankers to develop a rescue plan. Granted, Mr. Trump says the company is less than 1% of his personal holdings.

CHICAGO–Mr. Trump is engaged in a bitter legal battle with Deutsche Bank over the fate of his Trump International Hotel & Tower in Chicago, which was slated to be the tallest building in the U.S.

The suit, filed in New York state Supreme Court in Manhattan on Friday, demands Mr. Trump pay a $40 million personal guarantee connected to a $640 million construction loan Deutsche Bank originated in 2005. The loan came due Nov. 7 with an outstanding balance of $334 million. Mr. Trump has put $77 million of his own equity into the tower that he would stand to lose in any potential foreclosure.

PHILADELPHIA–A Trump Tower with apartments that were supposed to sell for $700,000 or more has been halted.

So does this mean we could see a re-run of Mr. Trump’s last brush with financial ruin in the early 1990s?

Hardly.

The one thing Mr. Trump learned from his near-bust experience is never to put too much of your own money on the line. Mr. Trump doesn’t “own” most of his real-estate projects–he slaps his name on the buildings and collects licensing fees and small equity payouts. It is his partners who put up the cash and fund the construction.

What is more, Mr. Trump has a more-diversified revenue stream these days, what with his clothing line, golf resorts, books, speeches, vodka, magazines and beauty pageants. Not to mention the fact that even his children are earning their keep these days, with Ivanka’s jewelry line and other ventures.

It is unclear what Mr. Trump’s worth really is. Forbes puts it at $3 billion, but Mr. Trump’s lawsuit against author Timothy L. O’Brien–who claimed Mr. Trump was worth from $150 million to $250 million–is still proceeding.

Whatever his net worth, Mr. Trump is likely to hang on to a lot more of it this time around.

Article From - Wall Street Journal