US leader, Donald Trump has had more than $270 million in debt forgiven since 2010 after he failed to repay his lenders for a Chicago skyscraper building development, a new report by the New York Times alleges.
According to the report published Tuesday night, October 27, after the Trump International Hotel & Tower in Chicago encountered financial problems, big banks and hedge funds granted Trump more time to repay his debts, much of which was ultimately forgiven by the banks.
The report also stated that Trump paid almost nothing as federal income on the forgiven debts because he incurred financial losses in his other businesses.
According to the report, Trump arranged for two of his companies to borrow more than $700 million for the Chicago development and went to Deutsche Bank for the majority of the money.
The bank agreed to lend $640 million to the project, the newspaper said, but after construction delays, the loan came due while portions of the building were still unfinished.
Deutsche bank initially granted Trump an extension on paying back the loan, but Trump sued the bank along with Fortress Investment Group which had provided a $130 million loan for the project, for not giving him another extra time to pay off the loan.
The report also stated that Trump charged that Deutsche had engaged in “predatory lending practices.”
In July 2010, Deutsche Bank, Fortress and Trump reached a private settlement without disclosing the terms, the Times reported.
This report comes a month after the New York Times reported that Trump paid no federal income taxes whatsoever in 10 out of 15 years beginning in 2000 because he reported losing significantly more than he made.
The report alleged that in his first year in the White House, Trump paid just $750 in federal income taxes.
In response to the report, Trump Organization chief legal officer Alan Garten told the New York Times that the organization and Trump had paid all necessary taxes on the forgiven debts.
“These were all arm’s length transactions that were voluntarily entered into between sophisticated parties many years ago in the aftermath of the 2008 global financial crisis and the resulting collapse of the real estate markets,” Garten said.
Trump has never publicly released his tax returns claiming they are being audited by the IRS.