Questions raised about overpriced Trump real estate sale that netted three Trump kids $13 million
Forbes on Friday published a lengthy story about how the Trump Organization managed to successfully refinance a large chunk of its considerable debts despite being under indictment for alleged tax fraud.
Although some legal pundits predicted doom for the Trump Organization after it was hit with a criminal indictment last year, it turns out that the firm's accountants still had some tricks up their sleeves even if they could no longer haul in loans from major lending institutions.
"Two of its most troublesome Deutsche Bank loans, totaling $295 million, are now off the books," Forbes reports. "The former president sold his money-losing hotel in Washington, D.C., to an investment shop connected to former Major League Baseball star Alex Rodriguez and retired boxing champion Floyd Mayweather, thanks to help from a firm tied to computer billionaire Michael Dell. Trump also refinanced $125 million of debt against a Miami golf resort and reworked a $100 million mortgage at Trump Tower."
The sale of the Trump D.C. hotel is particularly noteworthy, as Forbes reports that the Trump Organization initially tried to sell it for an "outrageous" sum of $500 million, which independent appraisers say was more than twice its actual worth.
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While the Trumps never got anyone willing to fork over a half a billion, they did find a Miami-based firm named CGI Merchant Group that took it off their hands for $375, which was still significantly higher than what most analysts believed it was worth.
But where things get strange, writes Forbes, is the total secrecy surrounding CGI's investors.
"The full roster of CGI’s investors remains secret," the publication writes. "The firm did not even share the names with the General Services Administration, the federal agency that oversees the lease on the hotel, according to a letter that members of the House Committee on Oversight and Reform sent to CGI."
One investor who had previously expressed interest in purchasing the property expressed shock to Forbes about what the hotel really sold for, especially since the Trump D.C. Hotel was notoriously a money loser.
In the end, the deal was enough to pay off the Deutsche Bank loans while also netting $13 million a piece for the former president's three eldest children.