Donald Trump has spent over $40m to defend himself against criminal and civil litigation in 2023.
This market resolves to YES if, before January 20, 2025 at 11:59:59am EST, Trump declares any form of bankruptcy in a personal capacity. Otherwise, it resolves to NO.
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3.00Is "bankruptcy for corporate entities" a "personal capacity"? Regarding this article https://www.nytimes.com/2024/03/18/nyregion/trump-bond-civil-fraud-case.html?smid=nytcore-ios-share&referringSource=articleShare&sgrp=c-cb
@Lion No. A corporation's main purpose is that it is designed to shield its owners from personal bankruptcy. A limited liability company (LLC) is formed so that if your business fails, the only assets that can be seized by the creditors are those that the business owns, and not yours.
@Lion This market is undervalued, so I bet YES on it because it is an objective market.
The ruling against Trump does make him liable in a personal capacity, and they might even be able to "pierce the corporate veil" for the money owed by his corporation. He does not have enough cash to pay, which is why he has been denied bond 30 times and has told the judge that.
He has a week left, which is insufficient time to sell a skyscraper. A declaration of chapter 11 bankruptcy would put collection efforts on hold with an "automatic stay," and the US Trustee could then step in and overrule New York's timeline. The Trustee's job is to maximize value for creditors by developing a reorganization plan. Here, the unsecured creditors would include E. Jean Carroll, the State of New York, and a British citizen who won a judgment against him last week for revealing he was a spy and defamation of character, along with more ordinary creditors like the banks he owes credit card debt to.
In this case, the reorgnization plan would include identifying the buildings that are valuable enough to satisfy the judgment, and then conducting a lengthy buyer search for those buildings. The buildings would be sold, and the cash would then be distributed to the creditors. After that, the bankruptcy plan would end and Trump would resume control of his remaining assets and whatever cash was left over from the sale that was not due to the creditors.
Chapter 11 bankruptcy is the obvious way for Trump to proceed here, and would be in line with his goals of delaying as much as possible until after the election. Chapter 11 bankruptcy differs from chapter 7, which is when there is insufficient funds and all assets would be liquidated, leaving the filer with a $100,000 house and some limited assets like a flip phone, a 19" TV, and a few thousand dollar car.
The only counterargument is that if he declares bankruptcy, it would be the headline for days, and it would cut against his narrative of being a good businessman who is equipped to run the country like a business.
@SteveSokolowski Fair enough, I believe he'll do everything in his power to avoid declaring bankruptcy because it would be a significant blow to his campaign. (Let's not forget that he has very wealthy friends and connections who'd profit on him becoming president.) That's why I think this question is overvalued. But that's just my opinion, I think it's fine to disagree. I guess we'll see.
@Lion He does have very wealthy friends.
The problem is that his debts are just unimaginably large. Biden has $150m for his entire campaign, and Trump's debts are around $500m (so far!)
This amount of money is so unfathomable that nobody is able to, or would want to, step in and throw away a fortune saving him.
See this related market:
https://manifold.markets/SteveSokolowski/will-rudy-giuliani-declare-bankrupt
