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Politics

Trump's tale of bankruptcy contains a blind-spot

Opening sequence

Opening sequence

Politics

Trump's tale of bankruptcy contains a blind-spot

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COMING UP:Trump's tale of bankruptcy contains a blind-spot

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Transcript

00:00:00
>> Thank you.>>
APPLAUSE
>> Long before Donald Trump was a presidential candidate, he was an aspiring real estate developer. And in 1990 he faced the greatest challenge he'd ever confronted.>> He had a lot of balls in the air, and they were all financed by loans, and he ran out of cash.
00:00:16
>> Trump owed over $4 billion to more than 70 banks when the real estate market tanked. He claims the banks capitulated when he demanded they renegotiate those loans. But Reuters political reporter, Emily Flitter, has been digging into Trump's business history. And found some who say Trump was blind to his problems, and managed to weather the storm because others lifted him out of trouble.
00:00:39
>> In the book that he wrote in 1997, The Art of the Comeback. He says that he went to his bankers in March of 1990 when he was going to miss a payment on a loan, and that's how the whole thing started. It's not how the whole thing started according to the bankers I interviewed.
00:00:55
One of the people in the story actually recalls a moment when Trump drew down all $100 million of a line of credit that he had in a single day. And that set off some alarm bells and then the banks realised that he was about to declare bankruptcy and went to him.
00:01:14
Basically the bankers were in control and Trump was in their hands. And they needed him to work with them to help sell off the assets that he had borrowed so heavily on so that they could get some of their money back. But other than that he didn't really have a lot of control.
00:01:30
>> The banks gave Trump a monthly allowance to pay his employees and overhead costs. While he worked with them to sell off the properties and cover their losses.>> I'm the king of debt, I'm great with debt. No body knows debt better than me. I've made a fortune by using debt.
00:01:42
>> Trump touts his financial success as his key qualification for the job of president. But his record suggests significant missteps along the way.>> He talks about reducing the U.S. debt, and how it has spun out of control in this past administration. Meanwhile, he has shown that there was a time in his own business career when he let that spin out of control.
00:02:07
>> Trump's spokesperson declined to comment for this story.
00:02:10
MUSIC]