The financial crisis was in full swing when Donald J. Trump traveled to Chicago in late September 2008 to mark the near-completion of his 92-floor skyscraper.
The fortunes of big companies, small businesses and millions of Americans — including the Trumps — were in peril. But the family patriarch was jubilant as he stood on the terrace of his gleaming glass tower.
He and his family hoped the Trump International Hotel & Tower would cement their company’s reputation as one of the world’s marquee developers of luxury real estate.
Instead, the skyscraper became another disappointment in a portfolio filled with them. Construction lagged. Condos proved hard to sell. Retail space sat vacant.
Yet for Mr. Trump and his company, the Chicago experience also turned out to be something else: the latest example of his ability to strong-arm major financial institutions and exploit the tax code to cushion the blow of his repeated business failures.
The president’s federal income tax records, obtained by The New York Times, show for the first time that, since 2010, his lenders have forgiven about $287 million in debt that he failed to repay. The vast majority was related to the Chicago project.
How Mr. Trump found trouble in Chicago, and maneuvered his way out of it, is a case study in doing business the Trump way.
When the project encountered problems, he tried to walk away from his huge debts. For most individuals or businesses, that would have been a recipe for ruin. But tax-return data, other records and interviews show that rather than warring with a notoriously litigious and headline-seeking client, lenders cut Mr. Trump slack — exactly what he seemed to have been counting on.
Big banks and hedge funds gave him years of extra time to repay his debts. Even after Mr. Trump sued his largest lender, accusing it of preying on him, the bank agreed to lend him another $99 million — more than twice as much as was previously known — so that he could pay back what he still owed the bank on the defaulted Chicago loan, records show.
Ultimately, Mr. Trump’s lenders forgave much of what he owed.
Those forgiven debts are now part of a broader investigation of Mr. Trump’s business by the New York attorney general.
Alan Garten, the Trump Organization’s chief legal officer, said the company and Mr. Trump appropriately accounted for and paid all taxes due 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,” Mr. Garten said.