Trump And The STRATEGY of Bankruptcies

One of the most note-worthy events of the 2016-election was sort of forgotten or brushed aside because it wasn't understood by people who are not experts in fraudulent economics. It's likely that that goes for most of the Trump voters both then and now, but not for Hillary Clinton who actually asked her opponent about his many bankruptcies:

 

“You’ve taken business bankruptcies six times.”
–Hillary Clinton

“On occasion – four times – we used certain laws that are there.”

–Donald Trump

 

Well, following the law usually is a good thing, but exploiting it is not, and that's what Donald Trump did several times .... He is what we in Danish call a "konkursrytter", but his repeated practice doesn't - as far as I can see - have a just as expressive term in English. Well, never mind, let's call him a "Phoenix with a very ruffled plumage" as that is what he is, and has been for years. 

It's well known that his father gave him $400 million and he spent a lot of money on business adventures that led to bankruptcies: The Taj Mahal declared bankruptcy in 1991, the Trump Plaza and the Trump Castle in 1992. However, instead of liquidate the debt his lenders restructured it which made it possible for Trump to put his casino holdings into a new company which (lo and behold!!!!!), went bankrupt in 2004. And, as was to be expected, the company that emerged from that bankruptcy-restructuring declared bankruptcy in 2009. The 6th bankruptcy was the Plaza Hotel, which went bankrupt by 1992 after being bought in 1988. 

All of this smacks of "Illegal phoenix activity which occurs when a new company, for little or no value, continues the business of an existing company that has been liquidated or otherwise abandoned to avoid paying outstanding debts, which can include taxes, creditors and employee entitlements."

I think Hillary recognized this pattern, but unfortunately she didn't pursue it more than she did even though it looks like blatant economic fraud: "This illegal practice usually happens when company directors abandon the company or transfer the business of an existing company to a new company without paying true or market value, leaving debts with the old company. Once the assets have been transferred, the old company is placed in liquidation or abandoned. If the liquidator is appointed, there are no assets to recover, which means creditors cannot be paid."

Abusing this system that robs other people of their money must have been a lark for someone like Don the Con: "Once the assets are transferred to a new company, the directors continue to operate the business. This gives the new business an unfair advantage when competing for work, because they have less debt and lower operating costs. Illegal phoenix activity directly impacts sub-contractors, creditors and employees as they are left unpaid and out of pocket. It also indirectly impacts the broader community because the company avoids having to pay tax, while at the same time Government often has to subsidise outstanding employee entitlements of liquidated companies."

Sadly enough illegal phoenix activity costs employees a lot in unpaid entitlements. Also it costs the Government around $1,660 million in unpaid taxes ....

 

https://www.washingtonpost.com/politics/2016/live-updates/general-election/real-time-fact-checking-and-analysis-of-the-first-presidential-debate/fact-check-has-trump-declared-bankruptcy-four-or-six-times/ 

 

https://www.abi.org/feed-item/examining-donald-trump%E2%80%99s-chapter-11-bankruptcies 

 

https://asic.gov.au/for-business/small-business/closing-a-small-business/illegal-phoenix-activity/ 

 

Wikipedia

 

Related links

• Where to report illegal phoenix activity
• ASIC action on illegal phoenix activity
• Resigning or removing a company director