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Eric Trump says he was laughed at while attempting to secure his dad's $454 million bond (www.salon.com)

submitted 8 months ago by ZeroCool@slrpnk.net to c/nottheonion@lemmy.world

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[–] No_Ones_Slick_Like_Gaston@lemmy.world 11 points 8 months ago (1 children)

Like literally chubb dogded a bullet lending this money earlier rather than having to be available for the next big payout. If you ask me is a small price to pay for salvation

[–] gregorum@lemm.ee 17 points 8 months ago* (last edited 8 months ago) (1 children)

They still loaned him a fuck ton of money that they sure won’t ever see again. So I don’t know how they dodged a bullet.

[–] partial_accumen@lemmy.world 32 points 8 months ago (1 children)

Chubb did a fully collateralized bond. Meaning they got something of actual value, not just trump's word. In this case a Schawb brokerage account full of stocks and bonds for (I believe) more than the value of the bond. Plus Chubb probably added a fee on top of the value of the bond to service the transaction. When trump loses the E Jean Carroll appeal, Chubb will hand over cash and sell off the assets in the Schawb account and pocket their service fee.

[–] jonne@infosec.pub 3 points 8 months ago (1 children)

Why would they do it this way instead of just directly selling what's in the account? I get that it takes time to unwind stuff like that, but surely it can be done in the time the judge gave?

[–] obviouspornalt@lemmynsfw.com 5 points 8 months ago (1 children)

Taxes. If by some stroke of miracle he wins the appeal, he won't have to pay capital gains taxes that he otherwise would have had to pay if the portfolio was liquidated.

[–] partial_accumen@lemmy.world 3 points 8 months ago

This. And to put numbers on it, long term cap gains taxes (for things in the account held for 2 years or more) is 20%. For short term (things in the account owned for less that 2 years) it can be as 37%. So if the account is just used as collateral, and Chubb charged a fee of less than 20% then the bond is a cheaper way to get the money for the appeal.