Basically the AG is claiming, banks/other lenders, insurance companies, and people who invested in securities based on Trump's loans.
The claim is that by inflating his net worth on his statements of financial condition, Trump was able to get lower interest rates and bigger loans. If he was indeed worth less, the loans would have been riskier and the banks would have charged more or not made them at all. Trump's biggest lender Deutsche Bank was giving him 2% percent based on personal guarantees that his worth would always be above $2.5 billion and he would always keep at least $50 cash on hand. (These loans were not just based on the property itself, but Trump himself.)
Trump's second biggest lender was Ladder Capital a real estate investment trust. They packed up trump loans in mortgage back securities, CMBS. If you remember the financial crisis, riskier securities get a lower investment grade and are harder to sell.....you usually have to offer higher return to offset the risk.
This is the crux of the AG's claim and what Trump will have to attack once the defense presents their case.
The Trump Organization’s skewed financial statements may have cost banks more than $168 million in interest, according to an expert witness hired by the New York attorney general’s office.
Michiel McCarty, chairman and CEO at the investment bank M.M. Dillon & Co., testified Wednesday to his “lost interest calculations” for banks that handed out loans to the Trump Organization. His calculations determined that across four Trump Organization assets, banks lost out on just over $168 million in interest.
The assets — 40 Wall Street, Trump’s Chicago hotel, the Old Post Office-turned-hotel and Trump’s golf course in Doral, Fla. — each lost banks tens of millions of dollars in interest across nearly a decade, according to McCarty’s assessment.
Basically the AG is claiming, banks/other lenders, insurance companies, and people who invested in securities based on Trump's loans.
The claim is that by inflating his net worth on his statements of financial condition, Trump was able to get lower interest rates and bigger loans. If he was indeed worth less, the loans would have been riskier and the banks would have charged more or not made them at all. Trump's biggest lender Deutsche Bank was giving him 2% percent based on personal guarantees that his worth would always be above $2.5 billion and he would always keep at least $50 cash on hand. (These loans were not just based on the property itself, but Trump himself.)
Trump's second biggest lender was Ladder Capital a real estate investment trust. They packed up trump loans in mortgage back securities, CMBS. If you remember the financial crisis, riskier securities get a lower investment grade and are harder to sell.....you usually have to offer higher return to offset the risk.
This is the crux of the AG's claim and what Trump will have to attack once the defense presents their case.
https://thehill.com/regulation/court-battles/4287509-trump-orgs-false-financial-statements-cost-banks-168m-in-interest-ny-ag-financial-expert/