He will sign. In 1998, I was the tax lawyer representing Conseco in a joint venture with the Trump Organization to buy the General Motors Building. Conseco put up 99.9% of the capital, Trump put up 0.1% of the capital, and Lehman Brothers loaned the rest. The joint venture agreement was very straightforward. Income and deductions were based on capital contributions. Everything was agreed quickly by the lawyers. However, on the day before signing, we were told that Mr. Trump would be arriving at 10pm at our offices to negotiate the deal (which had already been negotiated).
He arrives with an entourage. A podium had been set up for him at the front of a long table in a conference room. He asks for some minor corporate changes. But then he demands that he get all of the depreciation deductions. Having negotiated, he put on his coat and left. All of the lawyers look at each other. The general counsel of Conseco said, “We put up 99.9% of the money; we get 99.9% of the depreciation deductions.” Trump’s lawyers say, “Don’t worry, he’ll sign.” I go home to sleep.
The next morning my corporate partner and Trump’s corporate lawyer take the joint venture agreement to Trump Tower for Trump’s signature. I’m in my office. The phone rings.
It’s my corporate partner. “Mr. Trump wants to speak to you.”
“Yes, Mr. Trump,” I say.
“Were you there last night?” he asks.
“Yes, Mr. Trump, I was.”
“Did you hear me last night?” he asks.
“Yes, Mr. Trump, I did.” I reply.
“So, does this agreement give me the depreciation deductions?” he asks.
“No, Mr. Trump, it does not.”
He’s angry now. “You were there last night, you heard me, and this agreement does not give me the depreciation deductions? Why not?!”
I know that the agreement could have been structured for Trump to get depreciation deductions (if he was willing to provide a “bottom guarantee”). But it wasn’t, so I answer truthfully: “Mr. Trump, the law does not permit you to get depreciation deductions.” He’s furious now. “The law does not permit me to get depreciation deductions?!”
“That’s right, Mr. Trump.”
He slams down the phone and signs the agreement.
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