Lien on me

Well, it's crying time again

Judge Engoron shot down the Trump request for extra time to turn in his homework. No, he won't delay giving Attorney General Letitia James the paperwork (it really is just that) needed to begin the process of recovering the approximately $450 million, including interest, that Trump owes the State of New York.

She said

We are prepared to make sure that the judgment is paid to New Yorkers, and yes, I look at 40 Wall Street each and every day,

referring to a Depression Era monstrosity with only its prime real estate and lofty views that allow enjoying New York without seeing it.

But there's so much more.

The Trump real estate empire

40 Wall Street: a case study

Fun facts:

It was the headquarters of The Bank of Manhattan Trust Company, one of the banks that combined eventually to form JPMorgan Chase Bank, N.A.
The bank grew out of Aaron Burr's Manhattan Company, originally established as a water utility
It is now a mixed use, retail, office, residental property
It is a "Class B" property in a down market with high vacancies in which commercial tenants are upgrading to now less-expensive Class A properties (Trump would disagree, but the building is almost 100 years old, and doesn't have any top-tier tenants.)
Recently, the vacancy rate has been approximately 17%
There is some potential to convert more of it to residential
The biggest tenant is Walgreens (formerly Duane Reade)
Donald Trump doesn't actually own it
He doesn't own it? Nope, the Trump Organization owns a lease on it
The lease used to be indirectly owned by Ferdinand and Imelda Marcos (figures)
It's mortgaged to the hilt, maybe more than a few times the equity
To multiple parties
$160,000,000 is due and payable July 2, 2025 as a balloon payment

The tangled web

Real estate and high finance involve a multiplicity of entities. Trust me, I used to do this for a living. 40 Wall Street is no different.

40 Wall Street LLC is an affiliate of the Trump Organization and the lessee under a long-term ground lease of the property, and lessor to various tenants in the property
In July 2015, Ladder lent 40 Wall Street LLC $160,000,000
The loan was split into several pieces
- Wilmington Trust, National Association, as Trustee for the Registered Holders of Wells Fargo Commercial Mortgage Trust 2015-LC22, Commercial Mortgage Pass Through Certificates Series 2015-LC22 now owns a promissory note with a face amount of $90,000,000, about 10% of a securitization deal
- Ladder Capital Finance I LLC and affiliated companies (Ladder) retained the balance and may have assigned one or more portions of its share to other securities
The loan and related notes mature on July 6, 2025 when a large balloon payment will be due
In addition to a mortgage on the property, Ladder took a security interest in all of 40 Wall Street LLC's right, title and interest in and to its assets owned then or later acquired and all products and proceeds later received to secure repayment
There are a number of other legal entities sharing identical addresses at a different location that may be Trump Organization affiliates against which Signature Bank had liens
- Signature Bank lent to the Trump Organization for other properties
- In March 2023 it became the fourth largest bank failure in U.S. history (pikers, only about a quarter of my trip with WaMu in inflation adjusted terms) following last year's cryptocurrency panic
- It was being investigated by the Department of Justice for money laundering
- Whatever outstanding loans it had with these entities may have ended up with Blackrock, the behemoth investment management firm or they are still with the FDIC

This is a highly distilled account of just on of the Trump Organization properties. Trump reported it on his Federal Election Commission report in April 2023 as a single line item. If I were going to be sending a team of lawyers to the Trump Organization to try to sort this, I'd tell them: "Do not assume that the records you find represent anything more than a starting point. Be careful to make notes of everything, especially sticky notes."

Why it matters

We don't know how much equity Trump has in the property after paying off the notes
We don't know if the notes have a prepayment penalty, which could reduce his proceeds if he pays off early
We don't know who he would turn to—maybe someone who wanted to be repaid in kind, not cash
Once the State of New York slaps a judgment lien on the property it's hard to imagine that anyone would take a refinance deal because they would be in a second lien position to a creditor who could be owed more than the property is worth
None of the stable geniuses (Père et fils) are going to be allowed access to whatever documentation on the existing loan arrangements that the Trump Organization has until after the loan comes due
Judge Jones will have signoff for an indefinite period