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PaperclipPerfector  7mo ago (text post)   26299 thread views

Culture War Roundup for the week of September 25, 2023

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The latest Trump legal woes comes once again from NY where a judge ordered his business dissolved for fraud. Nobody losts money and it came down to some misstatements. I haven’t read the full case, but the judge on a high profile part of the case is completely off. Not even ballpark off.

He valued Mar-a-Lago at 17-25 million. I texted a broker in the area and he told me 100 million for an ocean acre and 25 million for a non-ocean acres. Mar is between 17-20 acres depending where you look online. Palm Beach has gone up a lot since COVID so maybe divide those numbers by 2 since Trump made his filling. He listed the property at 450-650 million. Without doing a full underwriting (maybe zoning issues where it couldn’t be worth the raw land price) it still appears Mar is worth a lot of money.

If you are going to do lawfare shouldn’t you avoid obvious mistakes? It’s easy to see a headline and write this whole case off as political. It weakens public perception of all other cases if you make mistakes that are this stupid.

If I am remembering this case correctly he did likely violate the law and include some statement that were obviously false but in a category that no one besides Donald Trump gets prosecuted for. So the case of Mar-a-Lago violates a principle of maintaining plausible deniability.

Edit: @AshLael looked up the prosecutors brief and it appears they did not use the tax assessment for valuation purposes. Which would negate my main point. The judge has a history of making stuff up against real estate developers and being later reversed. It’s quite possible this judge hates developers and just does stupid things.

https://twitter.com/goodguyguaranty/status/1707232241925910944?s=46&t=aQ6ajj220jubjU7-o3SuWQ

https://nypost.com/2023/09/27/mar-a-lago-judges-developer-hating-past-is-a-big-win-for-donald-trump/

Which would change the ruling and it’s citations to much more of all developer are bastards story (which is culture war) than my why are you lawfaring stupidly story

The most objective misrepresentation would be the size of his triplex penthouse: is it 30k ft² or 11k ft²? The dispute starts with this Forbes article, which tells us that Trump occupies the top three floors along with his sole neighbor who has 3,368 ft². Trump had been claiming 33k or 30k ft², but the city records show only 10,996. This does seem like a large discrepancy, and the author doesn't have an explanation other than perhaps a large amount of mechanical space.

When looking at the details of Trump Tower, the floors are numbered, but not by how many floors there are. When you go up one floor from the 5th, you arrive at the 14th floor.

From a typical floor plan in Trump Tower, we can calculate that each residential floor is about 11k ft² (not including the large central square for elevators and stairs). If Trump owned the top three floors, this would nicely match his claim of 33k ft². From the 1983 declaration, the sum of the units on a typical floor is 10,089 ft². For the top three floors, there is a 2,764 ft² duplex, and two triplexes summing to 11,195 ft². This leaves at least 16,308 ft² unaccounted for on these top three floors.

If the triplex had large atriums, that could explain some of the missing floor space, but all the pictures I found showed normal-height (elaborately decorated) ceilings.

Most high-rise buildings have mechanical floors for HVAC, water pumps/tanks, etc. Trump Tower doesn't appear to have any dedicated mechanical floors, other than the roof above the 68th. Instead, there are mechanical rooms on the 16th, 27th, 28th, 29th, 66th, 67th, and 68th floors. When calculating "Usable Square Feet" for a full-floor tenant, these mechanical rooms are included. This gets us close to the claimed 30k ft².

So perhaps it's possible that two reported floor sizes, differing by a factor of three, are both accurate.

This is a remarkable level of theorycrafting for a situation where Trump has already made his own actual defence arguments and they bore no resemblance to this.

I don’t disagree the Penthouse appears to be wrong and misrepresented.

But I think you are arguing his numbers could be right. Maybe. Does seem weird to say 3x but so maybe they had argument for that.

You are making me curious how these ever got released. Banks wouldn’t give out client info like this unless they were suing.

He valued Mar-a-Lago at 17-25 million. I texted a broker in the area and he told me 100 million for an ocean acre and 25 million for a non-ocean acres. Mar is between 17-20 acres depending where you look online. Palm Beach has gone up a lot since COVID so maybe divide those numbers by 2 since Trump made his filling. He listed the property at 450-650 million. Without doing a full underwriting (maybe zoning issues where it couldn’t be worth the raw land price) it still appears Mar is worth a lot of money.

Those issues very much exist - as the judge highlights in the ruling. Mar-a-Lago cannot be used for anything other than as a social club. Valuing it as if it were unrestricted land is obviously going to get you much larger numbers.

It’s still worth atleast the most expensive home in palm beach which is a tenth of the size or 250 million. It’s allowed to be a residence.

Could even be worth more than sfh because would be impossible for a billionaire to assembly a lot like that now.

It’s allowed to be a residence.

Is it?

Donald Trump agreed that "Trump intend [s] to forever extinguish [his] right to develop or use the Property for any purpose other than club use (the 2002 Deed ).

He’s literally living there. And yes it’s allowed to be used as a private residence.

Can you provide any evidence that it's allowed? The deed seems to say otherwise. And just because he's doing it doesn't mean that the deed allows it - Trump is well known for bending/breaking various rules.

Looked it up technically has to be listed as an employee. The deed allows that.

Wait, does that mean that by dissolving the company, the judge is “firing” him and thus nullifying his residence there?

That would be a hilarious outcome if so.

Lol, interesting.

Still seems like the sort of thing that would impact property value a large amount. "Yes Mister Gates, this beautiful beachfront estate can be all yours! But to actually live in it you need to continue operating it as a social club and hire yourself as an employee."

Nobody is disagreeing it affects the value. It’s the absurdity of emphasizing 27 million.

I believe it has a more residential private area. It’s gigantic anyone buying it is wanting an entertaining space where they get to be the boss. And as boss you get to pick your friends to be the members. Sort of like having the biggest yacht (which people do spend 500 million plus for yachts) and this yacht is surrounded by the richest people in the world. An exclusive billionaires club.

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Given his age, the only things he fears now is a long stint in jail . Trump has so far stayed above it all, whereas ppl close to him or who protested in jan 6th keep being jailed.

He valued Mar-a-Lago at 17-25 million. I texted a broker in the area and he told me 100 million for an ocean acre and 25 million for a non-ocean acres. Mar is between 17-20 acres depending where you look online. Palm Beach has gone up a lot since COVID so maybe divide those numbers by 2 since Trump made his filling. He listed the property at 450-650 million. Without doing a full underwriting (maybe zoning issues where it couldn’t be worth the raw land price) it still appears Mar is worth a lot of money.

this is obviously wrong. Zillow showed a 2.4 acre waterside Palm beach plot selling for $200 million.

I quoted a broker told me 100 an acre. Your calling me wrong because 200/2.4 is only $83 million?

no, you are right. the 17-25 million is wrong.

Ok I see what you meant

I feel a little bad about this, but whenever I see you complaining about Trump-persecution, it biases me in the other direction. As if the fact you felt a need to explain is evidence against his behavior. I know this isn’t really rational; it’s a reflex from years of apologetics.

I’m aware that courts, including NY in particular, have gone after Trump for stupid gotchas. Is this really one of them? The judge is granting a summary judgment in part. He gives detailed reasons why plaintiffs’ arguments were credible, while the defendants have consistently misrepresented their position. Throwing that out on the basis of one sloppy valuation is the definition of an isolated demand for rigor.

It looks like Trump has employed his traditional legal strategy of Throwing Shit at Walls. Dismiss this, dismiss that, usually in direct contradiction to precedent or to rulings earlier in the same case! See the fascinating section “Arguments Defendants Raise Again.” None of this inspires confidence.

If you’re going to do fraud, shouldn’t you avoid obvious mistakes? Mistakes like claiming a 3x overstatement of square footage was “subjective,” or that Mar-a-Lago was totally worth $1.5B, or that the SFCs could include a 15% premium for the “Trump brand” while simultaneously stating that they include no brand value. Easy things to avoid, right?

This isn't even close to fraud. It is just basically random speculation by him and banks. Everything is estimates made by people without even 12% knowledge of what reality is. These cases shouldn't be legal because they are treating art like a science. Its basically punishing a person extra above the bet they wagered just because. "Oh you put $500 on the Bills to beat the Redskins and Jim Kelly lost again on a fluke field goal, well actually we are taking another $2500 from you because reasons."

It is just basically random speculation by him and banks.

First of all, just by him. The banks (and other business partners) are the ones being defrauded. That's sort of the point.

Second, if it were random speculation, his estimates would be under the true value as often as they were over the true value.

Do you think that's true?

It's actually pretty easy to notice random noise, it tends to follow a well-defined distribution.

When every number over decades comes out heavily biased in the same direction, the direction that benefits you and hurts the people you're dealing with, that's not random noise. That's a pattern of misdirection.

Which is what this case is about.

The banks (and other business partners) are the ones being defrauded. That's sort of the point.

None of them alleged that during the course of business. They all got paid. The numbers were arbitrary.

Second, if it were random speculation, his estimates would be under the true value as often as they were over the true value.

Random was the wrong word. The right word is, self serving normal stuff that businesses do and tax people have to go along with 99.99999999% of the time or the state's economy collapses.

None of them alleged that during the course of business. They all got paid.

Didn't he brag about how often he files bankruptcy to get out of debts? Haven't his companies filed for bankruptcies more often than anyone else's in the US? Haven't there been hundreds of stories about his organizations not paying their bills and obligations?

I haven't gone over all the statements in the case to sort out the specific claims and charges on this particular valuation, but the idea that everyone got paid and no one was hurt by these practices feels leaves me skeptical.

However, part of the reason I'm not investigating that in more depth is because it doesn't matter; you can in fact be defrauded even if you don't lose money. If that sounds weird, remember that all of finance is about the expected value of an investment.

If Trump overstated the worth and stability of his holdings, then any loans he took out were riskier than the banks thought. The expected value of those loans was lower than the banks thought, and if they'd known the truth they might not have made those deals, or might have charged higher interest to compensate (which is a material loss even if the loans were paid back).

Drunk driving is illegal even if you don't hit someone, because it increases the chances you will hit someone. Similarly, lying about how risky it is to make a loan to you is fraud, even if you manage to pay back that particular loan.

The right word is, self serving normal stuff that businesses do and tax people have to go along with 99.99999999% of the time or the state's economy collapses.

Indeed, many things are both illegal and common, and enforcement of pretty much all crimes is spotty and arbitrary at best. That's a sad state of affairs and I think we should solve it with fewer laws; nonetheless, this is not a good reason to decry the law being enforced correctly one time, unless you decry it all the other times too (isolated demands for rigor etc).

That said, there's still such a thing as matter of degree; this was a very long pattern of very big lies on very big deals, a pretty big outlier from the common range for this type of thing.

Again, I agree that it's common to round your $146k income up to $150k when applying for a mortgage. This was a lot bigger than that.

Did you even read the document?

It contains a long list of dramatic, knowing exaggerations. The square footage of his apartment is not a bet. The outside valuations were not bets. He hired appraisers, got their assessments, then lied about the results when it came time to fish for loans. How is that a bet?

I guarantee you that the various appraisers cited in this case know more about the “reality” of these properties than you or anyone else who has become a sudden real estate expert.

I very much doubt there is anything like an expert in unique property values.

Funny, I’m seeing quite a few chiming in on how much MAL is totally worth.

If your defense of Trump is that he made factual claims to secure loans based not on facts, but rather "random speculation," then it seens to me that, with friends like you, who needs enemies?

Pretty sure his friends are all the banks that got paid back because he did a normal business thing that they also do and NY state law is just stupid and as applied to this case would, if applied everywhere, would turn NY State into 2009 Greece.

So claiming his Trump Tower apartment was 3 times bigger than it is was just random speculation?

To me, that is the fraud and not the estimates. The issue is since the judge went all crazy on the valuations I don’t know if the rest of the factual record is accurate and don’t really have the inclination to review the record. I’ll just wait for the appeals and see what happens.

The factual record in this example is accurate. The Judge accurately cited a real valuation by the Palm County assessor.

You may think that the judge is playing rhetorical games to exaggerate their case, but that's a rhetorical issue. The Judge did not representing matters of fact in any way in this example, so there's no reason this should make you doubt other matters of fact cited throughout the ruling.

But that’s the whole thing — a validation by an assessor isn’t a fmv assessment. It would be akin to the judge stating the value of the company is based off of net equity in a balance sheet.

If that were the only factor in her judgement on the matter, yes.

But it's one sentence out of several paragraphs of the ruling on that matter, which is itself just a summary/reference to many many more pages of evidence, filings, and proceedings.

Where’d the judge go crazy?

He’s citing appraisals from a variety of firms, retained by everyone from Trump to the banks. Then he concludes, yeah, Trump’s guys had these appraisals when they made statements to the contrary. I don’t think he made up any numbers himself.

The existence of these appraisals is factual. Their contents are public record; I don’t think the plaintiff was lying about them. Are you arguing that, if the appraisals were so unrealistically low, lying about their contents was legally correct?

Citing a tax assessors valuation is going crazy because tax assessors aren’t really based on FMV

If you’re throwing out those…what do you think the appeal is supposed to turn up?

This ground has been trod. Exhaustively, judging by the specific sanctions applied to defendant’s counsel. The judge found it unconvincing, perhaps because several of the appraisals were not tax assessments. At least one specifically calls out FMV.

I can’t help but feel like an appeal could confirm all the same things, address your complaint specifically, and you’d turn around and mine for another factoid that favors Trump.

You can feel that way. Kind of a weird thing to say given that I’ve noted there does seem to be potential fraud here (and have said I believe he is guilty on the documents case). But yeah I’m just a mindless Trump fan boy.

Real estate square footages are so often exaggerated

I’ve noticed that rental units from a professional complex always seem small compared to an identical unit rented by an owner in a condo building.

There are some reasons how sq footage can be counted different. You can measure every room and get a number (excludes the carpentry work) or just measure what it would be as raw space. Commercial has even more leeway on counting space (outside hallways to offices I believe can be counted differently).

Care to elaborate?

I did see Beckman v Wells Fargo, where the broker advertised twice as much lakefront as the property really had. They ended up protected from liability because they relied on county and bank records.

If you can show me where a suit was dismissed for the broker claiming square footage was “subjective,” as the Trump team attempted, I’d love to see it.

I would like to see one other case where the state ever prosecuted a situation like this. And the mar-a-lago stuff is literally them throwing shit at the wall.

I feel like anyone in finance finds this case a joke.

Here, first google result.

I feel like prosecutions for fraud over misvaluing assets are a lot more common than you're trying to imply here. That's like a normal law that gets enforced whenever it's egregious enough to piss off the wrong people pretty regularly (which is how most laws are enforced, sad to say).

So in that case someone lost money? Not the same thing.

Comparing a Ponzi scheme to a loan that was paid back.

Still a crime.

If you falsely convince a lender that you have a 1% chance of default when you really have a 10% chance, you have dishonestly gained a financial advantage by conning them into unknowingly assuming a greater risk - despite the fact that there's still a 90% chance that everything goes fine.

I think that’s far more extreme probability than what occurred. And well the motte that it might technically be a crime. My guess is even without his exaggerations they still make the loans at the same terms.

The Bailey of course is this is a lot like when OJ got 36 years for some assault and theft. Probably should have been a year but they gave him 36 to punish him for the murder he was innocent of.

I’m also not 100% sure this is even a crime. Valuations themselves are tricky. Only the penthouse sq footage seems like it’s a potential material miststatement.

If we went thru every companies financial statements looking for errors like this then every CEO would be in jail.

I believe we did agree the 27 million number was the judge freelancing and rather poorly as I edited.

My guess is even without his exaggerations they still make the loans at the same terms.

That's not really a sound basis for law. 'You can get away with misrepresenting your financial situation to creditors as long as you do pay it back and after the fact it's decided that it might not have made a great deal of difference on the original decision of those creditors' - why say that? Just don't lie.

Shrug. It’s really easy to find fraud cases where a seller misrepresented the property, but those are usually on a much smaller scale. Plus Trump only took out loans based on his claims; he didn’t actually transfer any property. NY §63(12) prosecutions, on the other hand, are common enough. But they are usually corporate fraud schemes.

I dunno, I want to challenge you to find a real estate SFC which inflated value but didn’t get called out. But I know that’s unreasonable.

The question is whether a self assessed value is fraud. I could tell a bank “in my judgement my house is worth a billion dollars so loan me 500m” If I give the bank access to my house etc and they loan on that basis, it seems hard for them to argue “he overstated the value of his property.” They could review for reasonableness my belief and seemed to believe it reasonable.

No I'm pretty sure that's fraud.

You may have an intuition that you wouldn't be prosecuted for it, which is true, because they'd just laugh in your face instead.

But if you were someone who for some reason had the credibility to get them to believe you and the deal went through, I'm pretty sure that's just fraud and you can be prosecuted for it.

The courts don't have a legal standard of 'that's just, like, your opinion, man'.

They have standards like 'reasonable belief' and 'mens rea' and things like that.

Those standards can be hard to pin down or to prove, but they do exist and are used regularly in cases like this. It's not just 'anything goes because all knowledge is probabilistic and all beliefs are subjective'.

Did they?

The judgment cites an incident where the bank asks “are you aware of any other professional valuations?” And they lie and say no. That doesn’t sound like the bank wants to use self valuation.

Agreed that would be fraud if true. But that’s consistent with my position. Lying about say sq footage is different from your opinion about the value per sq footage.

The whole ruling has a very casual, Reddity tone to it that puts me off quite a bit. I'm not necessarily the biggest fan of heavy legalese, but are Groundhog Day references and phrasings like "We are way beyond the point of 'sophisticated counsel should have known better'..." really where judicial writing is at these days?

I also notice that I'm confused -- is the judge really ordering the dissolution of multiple billion-ish dollar LLCs as a pre-trial judgement? This seems like jumping the gun a bit, no?

is the judge really ordering the dissolution of multiple billion-ish dollar LLCs as a pre-trial judgement?

It is a summary judgment. Final judgments are issued pursuant to summary judgment all the time. In such cases, the parties agree on the relevant facts (ie, the facts necessary for judgment on way or the other), so there is no need for a trial, because the purpose of a trial is to resolve disputed issues of fact. All that is needed is for the court to apply the law to the facts. Note that both sides moved for summary judgment in their favor.

To your first question: you can generally tell when a judge is pretty sick of one party or another when you read their rulings. If they feel like the other parties aren't taking the process seriously or taking advantage of the system, their tone will reflect that.

It is not uncommon for judges to joke or use incredible amounts of sarcasm in the court room. The supreme court can get fairly notorious about roasting and escalationary language in their rulings. Whether or not it's justified in the Trump cases, I'm not sure, and haven't been paying much attention, however considering the incentives at play it wouldn't be a surprise.

I'm not talking about the judge being mean to Trump/team -- this is by no means surprising to me.

Just that the language in the ruling seems very casual/bantery -- I love a good legal roast, but part of what makes them great is that they are couched in formal and polite language -- "my learned friend" sort of thing.

I admit I only skimmed the damn thing (it's also yuge) but the bits I read just kept making me cringe -- to drill down, "we are way beyond the point" sounds like something a school guidance counsellor would write; a judge, I'd expect to say something like "It is well past the point where I can compel myself to believe that the Trump lawyers are accidentally coming before this court with the same arguments for the third time" -- arguably even harsher, but not invoking Bill Murray movies nor the royal we.

You must not be familiar with Alex Kozinski, formerly of the Ninth Circuit:

"AIG's lawyers sat around contemplating their navels for two and one half years while the Bank was struggling to build up its good will."

"The only relevant evidence here demonstrates that, had Levolor done every little thing Ada Kern claims it should have, she would still have been laid off. Where, then, is her beef? ..."

"Carter stopped just short of pinning a Boy Scout Merit Badge on Silverman [a key government witness]."

"Miller was a prostitute, heroin user and fugitive from Cana- dian justice; but otherwise she was okay."

""Sex on the Internet?," they all said. "That'll never make any money." But computer-geek-turned-entrepreneur Gary Kremen knew an opportunity when he saw it. The year was 1994; domain names were free for the asking, and it would be several years yet before Henry Blodget and hordes of eager NASDAQ day traders would turn the Internet into the Dutch tulip craze of our times. With a quick e-mail to the domain name registrar Network Solutions, Kremen became the proud owner of sex.com."

"The parties are advised to chill."

And of course Justice Scalia was no stranger to using a similar tone:

If, even as the price to be paid for a fifth vote, I ever joined an opinion for the Court that began: ‘The Constitution promises liberty to all within its reach, a liberty that includes certain specific rights that allow persons, within a lawful realm, to define and express their identity,’ I would hide my head in a bag. The Supreme Court of the United States has descended from the disciplined legal reasoning of John Marshall and Joseph Story to the mystical aphorisms of the fortune cookie.

I am saying that what you're complaining about is difficult, if not impossible to expect from the judicial branch. Different judges and assistants etc will all produce write-ups of extreme variance of quality and kind of language, and we're not about to unseat a judge simply because they used excoriating and casual if overly harsh language as opposed to the court room sarcasm we're used to.

That is, "we are way beyond the point" is not a phrase which would cause me to bat an eye, especially in cases where the judges felt one party or other was not playing nice or was turning the court processes into a circus.

I'm not exactly complaining, and certainly not saying I want to unseat the judge over casual language -- I'm saying that I haven't really seen this writing style before, even in decisions coming from some fairly podunk courts.

"This is just what it's like in NY" would be a valid answer or "yeah this particular judge writes like this all the time" -- 'we are way past the point' is just the first example I noticed on a second skim, because I'm sure not reading this thing again. I'm giving my impression based on my first read, not calling for the guy's head.

That said, I guess sloppy language combined with sloppy/insane assertions such as "Mar-a-Lago is worth no more than $25M" could add up to the impression that the judge may be a sloppy guy -- but my impression in that regard will not make much difference to Trump's fortunes in this one.

I agree that if the inflated valuations weren’t used to obtain any financial benefits (eg. borrow money or attract investors) then it’s not a serious issue. Still, the flipside then is ‘why lie lol?’.

But in a wider sense it mirrors most of Trump’s legal issues, ie. stuff that he really didn’t have to do and which didn’t benefit him in any way, but which he did for ego-related reasons that now allow political opponents to easily go after him.

I agree that if the inflated valuations weren’t used to obtain any financial benefits (eg. borrow money

They were used to borrow money.

I don’t know anything about commercial real estate, but weren’t people below saying that declared valuations in an SFC statement aren’t really relevant to these decisions?

From the OAG's filing:

Starting in 2011 the relationship with Deutsche Bank was revitalized when Mr. Trump and the Trump Organization initiated a relationship with bankers in the Private Wealth Management (“PWM”) division of Deutsche Bank, which enabled them to obtain more favorable terms than they could have received through the CRE division by having Mr. Trump personally guarantee the loans based on his net worth as reflected in his Statements of Financial Condition.

In essence, rather than obtain credit facilities through the wing of Deutsche Bank with an expertise in commercial real estate, Mr. Trump began to seek funds from a wing of Deutsche Bank focused on servicing ultrawealthy clients. Hence, Mr. Trump’s personal guaranty, and his representations regarding his finances that backed up that guaranty, featured prominently in Mr. Trump’s loan transactions through the PWM wing of Deutsche Bank.

Defendants submitted SFCs to Deustche Bank as part of their contractual obligations arising out of three different loans.

I do think it’s a little thin on the ground. I wasn’t able to casually find other prosecutions based on SFCs, which suggests they are either 1) rare or 2) observed mainly in the breach.

If you are going to do lawfare shouldn’t you avoid obvious mistakes?

Not if there's no one to call you on them. And who would do it? Not any court he can reach in the New York court system. And the Federal court system will just wash their hands of this by claiming there's no Federal question.

It is worth reading this actual section of the ruling (which is not OCR'ed so I can't copy/paste from it), as well as articles like this.

First of all, the judge did not value Mar-a-lago at 17-25M. He cited the official Palm Beach County Assessor appraisal for the property, and did so accurately. This is indeed the value Trump was taxed on in Palm Beach for Mar-a-lago

Basically, Trump accepted huge land use restrictions on Mar-a-lago, basically meaning he could never develop it as anything other than a social club and could not subdivide it or sell off portions of it in any way, in exchange for the property taxes being assessed on an income-based model instead of the normal way.

The tax-roll value assigned to Mar-a-Lago was not figured on what the land and buildings are worth in the traditional sense, according to the Palm Beach County Property's appraiser's office.

Instead, the values are figured using a formula called an “income approach,” which capitalizes the net operating income that the private club reports to the property appraiser each year.

The idea here is that these land use restrictions vastly decrease the productive value of Mar-a-lago as compared to other comparable real estate where you would immediately knock everything down and build high-priced condos for a huge profit. But when doing financial deals, he made up valuations that were in line with unrestricted land, like what you are talking about.

This is not actually true because if, for example, he staked Mar-a-lago as collateral for a loan and defaulted and a bank got the property, they would not be allowed to knock everything down and build a bunch of condos and sell them for half a billion dollars. They would be legally required to keep running it as a social club and earning income from its operation, which is (according to the palm beach assessor) more in line with what you'd expect for an enterprise worth $25M.

As always, reality has a surprising amount of detail, and you shouldn't believe everything you read in a tweet - even if it seems intuitively correct at first glance.

No this isn’t about “really has a surprising amount of detail”. I mean this is a complex valuation.

But the judge directly “only” states the 25 million value. Then says “an overvaluation of atleast 2,300% compared to assessors”

This is being willfully misleading. This feels like all the midtwits who try to emphasis the 50 intelligence agents who said hunters laptop was Russian (which he’s now suing them for accessing it) and then reply they gave a footnote that they actually knew nothing.

Nobody is debating that he’s NOT an allowed to subdivide it. And that does affect value but nowhere close to that value.

This is a case of what the news media does of them using a real piece of information in a misleading way. Most Americans don’t know tax appraisals and market appraisals are completely different and bear limited connection.

And I’ll be honest I think his 450-650 value was probably high back then. I could see it being worth 300 back then and he pumped it 50%. But the judge is lying in the document and basically created a press lease “Trump overstated 2300%” and that is not true. Average guy doesn’t know difference between a market appraisal and tax appraisal. Her conclusion is therefore lying.

Nobody is debating that he’s NOT an allowed to subdivide it.

That's funny because I didn't see Eric Trump, and of the right-wing outlets carrying his water, or the original post here mention it at all.

And that does affect value but nowhere close to that value.

This is just a statement. Why do you believe that? I explained my reasoning, feel free to explain yours.

I’ve numerous times explained my reasoning.

That being side I worked it out with ashlael - the prosecutor didn’t even use that 25 value. The judge hates real estate values and frequently gets overturned. That part was the judge freelancing

It is not correct to say the judge is the one valuing Mar-a-Lago at 17-25 million. The judge is just quoting the valuation from the Palm Beach County Assessor:

From 2011-2021, the Palm Beach County Assessor appraised the market value of Mar-a-Lago at between $18 million and $27.6 million.

You can read the full ruling here. The ruling also goes over a bunch of properties Trump owned where he lied about easily verifiable facts to inflate valuations, like claiming his Trump Tower triplex was 30k sq ft when it was actually 11k sq ft.

Seriously, just skip down to page 20 and start reading. For property after property Trump was in possession of third party appraisals of his properties that he inflated to many times their actual value when reporting their worth to other parties.

Seven Springs:

Notwithstanding receiving market values from professional appraisals in 2000, 2006, 2012, and 2014 valuing Seven Springs at or below $ 30 million, Donald Trump's 2011 SFC reported the value to be $ 261 million, and his 2012, 2013 and 2014 SFCs reportedthe value to be $ 291 million.

So he inflated the value of his property by almost 10x what an appraiser said it was worth.

40 Wall Street:

In 2010, Cushman & Wakefield appraised the Trump Organization's interest in 40 Wall Street at $200 million. Cushman & Wakefield appraised again in 2011 and 2012, reaching valuations of between $200 and $220 million.

Despite these appraisals, the 2011 and 2012 SFCs valued the Trump Organization's interest in the property at $524.7 million and $527.2 million, respectively, an overvaluation of more than $300 million each year.

Please tell me how it isn't fraud to lie to banks you're seeking a loan from and claim your assets are worth many times what they are actually appraised for.

Assessors for tax are notoriously different compared to actually FMV. Look at house sales and compare to assessment.

The Seven Springs case, at the very least, explicitly provides fair market value. Others generally list multiple appraisals, not just podunk county tax assessments. There’s also the part where defendants called a very cool and very knowledgeable expert witness specifically to claim he’d have assigned a higher market value. And where they argued, unsuccessfully, that SFCs don’t really have to use FMV. Clearly they were aware of the importance.

If Trump thought the assessors value was low the correct thing to do is hire an appraiser, get an actual value, and use that. As best the lawsuit seems to indicate Trump just made numbers up!

No it isn't. You are rarely obligated under the legal system to make yourself worse off voluntarily. Remaining silent is always an option except in civil cases, where you are still allowed to stay silent to preserve your rights in a criminal procedure.

Well valuations are kind of made up and differ significantly. It is an art not a science. My point is that using the assessor as if it was gospel unless proved otherwise is silly. The assessed value for local property tax is almost entirely irrelevant to the value of the land. The only real questions are “what was the value” and “was Trump’s value within the realm of possibility.” The assessor’s value (which isn’t based on a FMV standard) is irrelevant to those questions (outside of taxes affecting the value of the property).

It’s misinforming to a conclusion that becomes a lie because Joe midtwit doesn’t know difference between tax appraisal and a market appraisal. And being that they used it for a legal judgement by people who should know better and have a duty to know better I would say is grounds for disbarment.

These are lawyers and they do have professional standards and the things presented by the judge are just straight up lying.

It’s commonly advised to not fight a low assessment because it reduces your property taxes. No one would assume a corrupt and/or ignorant judge would use that against him decades later.

According to the decision, signed a deed which restricted use of the property for anything other than a social club, including surrendering the right to subdivide the property and build homes thereon. Yet, in its filings, the Trump Organization submitted a valuation that ignored those land use restrictions, and claimed a valuation 2300% higher than the assessed value. And, the only evidence presented to the court to support the higher valuation was a conclusory affidavit from an expert, which, being conclusory, is of essentially no evidentiary value under established Florida law, and indeed established law pretty much everywhere.

So, what basis do you have for saying that only a corrupt or ignorant judge would reach the conclusion he did?

If beach front property assessments in Florida are anything like farmland assessments in the Midwest, such a valuation might not be completely ridiculous. Around me, pretty much all farmland is assessed at $1,500–$2,000 per acre, even though land hasn’t sold for that since the 1990s. One large farm near me recently sold for $20,000 an acre, but the assessed value is only $1,931 an acre. No farmer would (or should) get in trouble for valuing his land at 2023 rates, no matter what the assessor thinks. I’m not saying Trump’s properties are definitely the same, but it doesn’t seem immediately ridiculous to assume they might be.

Ok, but did the Trumps produce evidence that properties in the area often sell for 10x their assessed value? And you are ignoring the reference to the claimed value ignoring the restrictions on development. That is pretty bad, if true.

Regardless, remember the point is not that the judge is correct; it is that the claim that his decision can only be the result of corruption or ignorance does not seem to be consistent with the facts.

Trump shouldnt have to. The state needs overwhelming evidence. Fraud where no bank lost money should lose as a matter of course.

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I’m typing this on my phone, so I’m not going to mess with links.

First, the county assessor lists Mar a Lago’s market value as $37 million. If it’s true that the judge valued it at $17–25 million, there’s already a major discrepancy. It’s worth noting that Trump paid $12 million for it in 1995, equivalent to $24.3 million today. For the property to be only worth $25 million, the judge has to assume that property values haven’t risen faster than inflation, which seems awfully dubious from where I sit. He also has to assume that the county assessor overvalued the property by 1.5–2.2 times its actual worth, which is interesting given his complaint that Trump has been overvaluing his property. Perhaps he felt the best way to compensate for Trump’s overvaluation was to opt for a noticeable undervaluation?

Secondly, some neighboring properties’ asking and sale prices are instructive. 168 King Rd. (4,874 sq. ft., not ocean-front) just sold for $14 million, against an assessed value of $4.1 million (and a market value of $8.4 million; I’m not clear what the difference between the two is). Another nearby property (500 Regents Park Rd—6,488 sq. ft., ocean-front) is listed for sale at $40 million, against an assessed value of $6.4 million ($12 million market value).

Mar-a-Lago’s main building, by contrast, is 37,414 sq. ft. The property also contains five more buildings, two pools, and five tennis courts, to say nothing of the land. That it’s all worth a measly $17–25 million doesn’t pass the smell test.

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On the Palm Beach property I’m knowledgeable to yes the result is corruption or ignorance or just trying to give the redditors a partisan talking point. There isn’t even plausible deniability here.

Even if Trump can’t subdivide it’s certainly worth more than sfh with 2 ocean front acres which are trading 200 million plus. The family buying that plot would buy Mar for 200 and just have 15 extra acres.

You might not be able to get the full value of 20 acres which is probably over a billion but it’s certainly worth more than the highest sfh in the neighborhood which gives a lower bound of probably 250 million.

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Trump relied on the testimony of the most relevant possible expert, a powerbroker in Palm Beach whose last deal involved Tommy Hilfiger’s property and who represented in one of the largest sales in recent Palm Beach history. He listed the specific features which, in his expert testimony, would lead the property to be sold at north of one billion dollars, namely that is an “exclusive family compound” and “in the most desirable section of Palm Beach”.

You are misinterpreting his statement as being conclusory. Why? The expert's ultimate assertion is not “speculative”, it is based on his experience and assessment of the features of the property. It is not “unsupported by any evidentiary foundation”, he specifies the exact evidentiary foundation.

No, it was the court that said it was conclusory, not me. And, are you sure you are familiar with the law on what constitutes a conclusory expert opinion under Florida law? Because the fact that you consider the identity of the expert relevant to that question suggests that you might not be.

Most importantly, note that the issue now is precisely that: Was the expert's opinion sufficiently nonconclusory to be entitled to weight under Florida law? I would think you would be sufficiently uncertain of the answer thereto to be a little less sure that the decision must be the product of corruption or incompetence.

If any such statement was made in evidence a MSJ is improper because that creates a legitimate question of material fact. The judge is in a tails he loses heads trump wins situation if ever a nonbiased person reviews his order.

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True, but an independent appraisal isn't something that's going to be used as the basis to change the assessment. While their jobs are similar, assessors and appraisers don't look at exactly the same things, and an appraisal isn't even something the assessor's office will even know about.

Didn’t the Judge cite an assessor’s valuation?

Yes, because that's what's publicly available. An appraiser's valuation isn't public except for in unusual circumstances (like the property is subject to litigation, as in this case), and even then the values are almost always outdated by that point.

They cited a tax value. That is not the same thing as an assessed value for market value. It’s a made up number they use for calculating taxes. And using it is an active attempt to deceive.

@coffee_enjoyer To be clear, an assessed value is one used for tax purposes. An appraised value is one used for market purposes, including determining collateral value.

This seems more egregious, though:

In 2010, Cushman & Wakefield appraised the Trump Organization's interest in 40 Wall Street at $200 million. Cushman & Wakefield appraised again in 2011 and 2012, reaching valuations of between $200 and $220 million.

Despite these appraisals, the 2011 and 2012 SFCs valued the Trump Organization's interest in the property at $524.7 million and $527.2 million, respectively, an overvaluation of more than $300 million each year.

Agreed. The one question is what duty of care did Trump have to the lenders? Could he say “I think land X is worth a billion dollars” and then if he provided all of the correct specs, cash flow, etc. it seems to me buyer beware (ie lender can use their own judgement to decide). If he said C&W said the land was worth 525m when they said 200m then that is fraud.

It seems like Trump may have fraudulent provided a sq foot number. That would fit the bill for fraud.

I agree those look more egregious. Which is my main point why include Mar-a-Lago at such a silly valuation. Why not hammer the ones where you have a better case.

I read the Mar-a-Lago and quickly see judge is an idiot. So it’s easy to assume they are doing shenanigans elsewhere.

That being said even on that building Trump may have been closer to market value. Appraisers are known for being lagging and backward looking. And the real estate market changed a lot between 2010 and 2012.

What you're missing are the land use restrictions that make it actually much less valuable on teh market than nearby lots.

I wish I could copy/paste from this part of the court ruling (the version I see is not OCRed), it's like 3 paragraphs and vastly clarifies the situation. Worth checking out if you care about this tweet.

Maybe the land is much less valuable but it would still be worth an order of magnitude more than the assessed value.

An order of magnitude more than the assessed value is already like 70% of the low end of OP's speculated value.

What do you mean by 'much less', and why do you think that?

Because we can look at much smaller properties around it and see how much they are worth. So even if per acre / per sq Ft MAL is worth much less it would still be worth a bunch because the amount of acres and sq Ft is much more than normal for this area.

$25mil is 'a bunch'.

You seem to agree with me that it will be worth less than surrounding properties, but you're still using them as your anchor.

The only question is how much less it is worth.

Absent any additional information about that, I'm fine trusting the county assessor and the judge, until someone shows me more evidence. I at least trust them more than Eric Trump, who is the source of this hot take.

But anyway, that's all sort of besides the point. It sounds like you agree with me that Trump significantly overstated the value of the property, which is what the judge was saying in this section.

The relevant section, copy/pasted for your convenience:

Donald Trump purchased Mar-a-Lago in 1985. In 1993, he sought , and obtained , permission from the Town of Palm Beach to turn the property into a social club (NYSCEF Doc. No. 900), and on August 10, 1993, he entered into a Declaration of Use Agreement by which he agreed the use of Land shall be for a private social club and that any additional uses of the Land shall be subject to approval by the applicable governmental authority including but not limited to the Town Council of the Town, the Landmarks Preservation Commission of the Town, the Architectural Review Commission of the Town, Palm Beach County, the State of Florida, the United States Government, and/ or any agencies under the foregoing governmental authorities. NYSCEF . No. 915 .

In 1995, Donald Trump signed a Deed of Conservation and Preservation Easement in which he gave up his right to use Mar-a-Lago for any purpose other than as a social club (the 1995 Deed) NYSCEFDoc. No.901. In 2002, Donald Trump signed a Deed of Development Rights NYSCEFDoc. No.902. Aspart of granting a conversation easement to the National Trust for Historic Preservation, Donald Trump agreed that "Trump intend [s] to forever extinguish [his] right to develop or use the Property for any purpose other than club use (the 2002 Deed). The 2002 Deed also specifically "limits changes to the Property including, without limitation, the division or subdivision of the Property for any purpose, including use as single family homes, the interior renovation of the mansion, which may be necessary and desirable for the sale of the Property as a single family residential estate, the construction of new buildings and the obstruction of open vistas." Id. In exchange for granting the easement, Mar-a-Lago was taxed at a significantly lower rate (the club rate) than it otherwise would have been (the private home rate). NYSCEF Doc. No.903.

From 2011-2021, the Palm Beach County Assessor appraised the market value of Mar-a - Lago at between$ 18 million and $27.6 million. NYSCEF No.905.

Notwithstanding, the SFCs values do not reflect these land use restrictions

Is it your contention that Trump is violating the land use restrictions by living at MAL? If he is not, then it seems MAL has at least value to someone to live there. Given its size and location that means MAL is worth a sizeable chunk.

I thought he might have been, but apparently the deal is that employees of the club are allowed to stay on site, so he's able to live there as a Mar-a-Lago employee or something? I dunno.

Edit: Having said that, all I was doing in this particular comment was giving @guesswho the quote he wanted.

Thanks!

I don’t disagree that some of the other valuations look off to me. My point is why the exaggeration on Mar-a-Lago which is the easiest one for the average person to look up and conclude the judge is an idiot. Property taxes in perhaps all locations but certainly many are not marked-to-market or anything close to market. They are often well below market (sometimes above market too often in poorer areas). The goal is that if one house is worth 20 million (market) and another is worth 10 million (market) that the assessed values would have a similar 2x to apply mileage rates too. It just seems silly to me they would even quote that. I’m not sure why the prosecutor would even feed that data to the judge because it’s not a market value and makes them look stupid.

He probably did knowingly exaggerate for his own self-worth ego. The key thing here is the statements on these values was not a key point to underwriting the loans and had no effect on any loan terms. There is no victim here the banks would have done the same deals regardless of what he said on the forms. It’s like if I call Amex to get a credit card and I asks for a $10 million limit. My portfolio lets even call it public markets so exact values is worth $1 billion but I tell them $2 billion. The bank doesn’t care I exaggerated.

I briefly read through the ruling so I might have missed it, but how are you certain the over-valuation of these properties didn't affect the terms or availability of any loan/insurance/financial agreement?

The bank doesn’t care I exaggerated.

The bank absolutely does care about your debt-to-asset ratio for a multitude of reasons, but more importantly they care if you're a liar.

A $10 million loan to someone with $1-2b in assets is likely a low risk for default. A $10 million loan to someone who lies on their financial statements is a reputational and financial risk.

He wasn’t directly borrowing against these properties. The debt was on other properties that were underwritten. High other assets only come into play if something goes wrong on those properties. So it could matter but if the loan was debatable I would assume the banks would underwrite the quality of his personal guarantee more than just rubber stamping what he submitted.

Right - and his personal guarantee is based on the valuation of his assets, which he overstated.

Find me one case with precedence here where a little exaggeration on this specific form with zero victims was pursued.

It's going to be pretty hard to find cases where there's no egregious harm because they would normally go undetected. And once there is harm, your company is probably insolvent and not worth pursuing by OAG.

If you're pointing out that this only got investigated because it's Trump, I agree. Unfortunately for him, the investigation uncovered a crime.

Actually this is in civil court not criminal which heavily indicates how weak of a case it is. Beside it being very rare for a civil case that isn’t origionating from a victim.

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The bank doesn't care if you commit fraud on loan paperwork for huge amounts of money? Why would you think that is true?

Like yeah they're not going to go after a first time home owner for rounding their income up from $117k to $120k. But when you start talking about hundreds of millions of dollars and your ability to repay it I think actually they do care.

I broadly agree, but one nitpick:

It weakens public perception of all other cases if you make mistakes that are this stupid.

Does it? Aren't most people pretty thoroughly cemented into their positions at this point? I know I'm basically just a hack at this point, but my basic thought is immediately, "sure, this isn't any more retarded than claiming that paying off some hooker with an accountant that recorded a detail incorrectly is a felony on the basis that it furthered an unspecified crime". Or that arguing with state election officials about how they've allowed a bunch of fraud is actually a conspiracy to deny people their rights. Or that the guy with sole discretion of classification is actually a felon for having documents that he failed to correctly file paperwork declassifying.

Meanwhile, people watching the movie on the other screen just see it as example thirty seven thousand of how Trump is a crook that commits fraud everywhere and isn't even actually all that rich.

It does weaken public perception, I think.

There was one poll recently that had Trump at 52% vs. Biden at 42%, so it's not like the only people who would vote for Trump are his core supporters.

I think Trump is a bad person and a bad President, but this case further updates me in the direction that Trump is the victim of politically motivated lawfare. Not everyone is a committed team player. In fact, independents are a plurality of the population. It's possible that ridiculous decisions such as this one will move the needle at least a little bit. Trump says he's being treated unfairly. That wasn't necessarily obvious before. But here comes clear and obvious evidence of it happening.

Twitter and Reddit left seem to be going all in on this today and buying he’s a crook. But I also think for the median voter this gives team Trump easy bulletin board material where a casual observer can be shown a Zillow screenshot of much higher valued properties that are 20 times smaller.

I’m not even against an argument that he did mistate the value when he gave it. Palm Beach is up a lot and has established itself even more as a rich commune. Like maybe it was worth 200 million then due to land restrictions.

It’s actually a very interesting appraisal. I could come up with anything from 400-500 today or 1.5-2 billion to the right retired billionaire. Yachts go for that. And this is a giant estate no one else would have in the most exclusive neighborhood to entertain.

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