Abraham Wallach thought he had scored a major career break when Donald J Trump hired him in 1990 for a senior executive role. Based on Trump's boasting and gaudy lifestyle, Wallach imagined he would soon be leading impressive construction projects around the globe.
Instead, he found an array of failing enterprises, he recalled on Monday. Many top executives had departed the Trump Organisation, and those who remained were often huddled in closed-door meetings with bankers and whispering worriedly among themselves.
"Everyone was very glum," Wallach said. "It was like getting on the Titanic just before the women and children were moved to the lifeboats."
That year, he would later learn, was the beginning of Trump's reckoning with a decade of rapid, debt-fuelled expansion.
The eclectic empire Trump had built with leverage from his father's brick-and-mortar fortune began to fail, generating enormous losses and bringing him to the brink of personal bankruptcy.
The full magnitude of the financial hemorrhaging was a closely held secret until this weekend, when The New York Times published portions of Trump's 1995 tax records that showed business losses of $916 million, creating a tax deduction that could have allowed him to legally avoid paying any federal income taxes for up to 18 years.
For a single businessman to declare losses approaching $1 billion is so extraordinary that it caused several accountants and lawyers consulted by The Times to blanch. The precise breakdown of that figure - specifically which Trump enterprises were responsible for how much - remains murky, hidden in a schedule attached to Trump's returns that has not become public.
But a review of public records and interviews with those who were present makes clear that it was decisions Trump made at the helm of his business empire during the 1980s that led to its nearly imploding.
Trump, the Republican nominee for president, portrays himself now as a self-made man who began life with what he has characterised as a meagre $1 million advance from his father.
That figure itself represents a significant understatement about the support his father provided him over the years. But in his darkest moment, Trump again leaned on his family's wealth, this time to ride out a financial tsunami.
At one point, the balance of his personal bank accounts was expected to drop below $1 million.
By 1990, Trump had amassed $3.4 billion in debt, much of it in the form of high-interest junk bonds. He was personally liable for $832.5 million of that.
He had bought a yacht for $29 million, the Plaza Hotel in Manhattan for $407 million and a failing airline for $365 million. All were losing money.
Details of the losses are not available, because the entities were privately held. But reviews by New Jersey casino regulators and securities filings related to debt offerings show a grim picture.
The Castle casino in Atlantic City recorded total losses of $93.2 million in 1990 and 1991. The Trump Regency hotel there lost $8.3 million in 1991. The Trump Plaza casino lost $29.2 million in 1991.
Casino regulators in New Jersey warned that "the possibility of a complete financial collapse of the Trump Organization is not out of the question." Most, if not all, of those losses would pass through to Mr. Trump's tax returns because of the ownership structure of the casinos.
The Casino Control Commission concluded in 1991 that "Mr. Trump cannot be considered financially stable, a condition for renewing his casino licenses at Taj Mahal, Castle and Plaza." Still, it did not pull the plug on him.
"The consequences of doing that would have been horrific," said Steven P. Perskie, who was chairman of the commission from 1991 to 1994. "We weren't prepared to do that unless we had no choice."
His airline, Trump Shuttle, lost $34.5 million during just six months in 1990.
In addition to actual losses from his other businesses, the nearly $1 billion total in losses probably also includes paper losses on Mr. Trump's real estate holdings through the use of depreciation rules that allow real estate developers to deduct the cost of a building over a number of years.
By the end of 1991, the amount of cash that Mr. Trump had personally available to him had fallen below $1.7 million and was expected to fall below $800,000 within months - a small cushion given his monthly expenditures.
Further squeezed by a recession, Mr. Trump fell $4.1 million behind on the property tax bill for a large swath of land he owned on the West Side of Manhattan.
The measures he promised to take repeatedly did not work, casino regulators noted. At several points, he turned to his family fortune.
He promised to make up for a cash shortfall with the sale of condominium units in Trump Tower in Manhattan. When that did not generate enough money, he filled the hole in his balance sheet with the "unforecasted receipt of funds from certain family-owned properties in New York City" - apparently referring to fees from properties his father, Fred C. Trump, had built outside Manhattan.
At the end of 1990, when Mr. Trump was facing an $18.4 million interest payment, his father sent a lawyer to the Castle casino to buy $3.3 million in chips and leave without cashing them, providing his son with an infusion of cash.
By 1993, Mr. Trump was still in dire straits. He dispatched a company executive to ask his siblings if he could borrow $10 million from their respective shares of the family trust. Mr. Trump received the loan, according to people who were involved and spoke on the condition of anonymity to avoid angering him, and went back for another $20 million the following year. Mr. Trump has denied borrowing from his siblings.
Mr. Trump had negotiated reduced interest rates on some of his loans, partially by agreeing to give up money-losing enterprises, including his airline, his yacht and a stake in the Plaza Hotel in Manhattan. His lenders forced him to live for a time on $450,000 a month.
In 1995, Mr. Trump began the transaction that would eventually free him from his financial travails. He took his struggling casinos public, selling stock to raise money and shifting his personal debt into the new company. The company continued to lose money and underperform its competitors, but Mr. Trump was paid roughly $45 million though 2009.
Mr. Wallach, who left the Trump Organization in 2001 to deal with a chronic shoplifting and theft problem, said the change in the organization was palpable. Mr. Trump began to regain his footing and focused again on real estate, taking steps to ensure that he was less dependent on his own cash and personally guaranteeing loans.
In 1996, the year that the tax records obtained by The Times were filed, Mr. Trump basked in the glow of news reports marking his apparent return from financial abyss. One such comeback article appeared in The Times in April of that year.
"This just represents the best point in my life," Mr. Trump told a Times reporter as he settled into a stretch limousine. "I think it says that what I've been doing over the years has been right."
Instead, he found an array of failing enterprises, he recalled on Monday. Many top executives had departed the Trump Organisation, and those who remained were often huddled in closed-door meetings with bankers and whispering worriedly among themselves.
"Everyone was very glum," Wallach said. "It was like getting on the Titanic just before the women and children were moved to the lifeboats."
That year, he would later learn, was the beginning of Trump's reckoning with a decade of rapid, debt-fuelled expansion.
The eclectic empire Trump had built with leverage from his father's brick-and-mortar fortune began to fail, generating enormous losses and bringing him to the brink of personal bankruptcy.
The full magnitude of the financial hemorrhaging was a closely held secret until this weekend, when The New York Times published portions of Trump's 1995 tax records that showed business losses of $916 million, creating a tax deduction that could have allowed him to legally avoid paying any federal income taxes for up to 18 years.
For a single businessman to declare losses approaching $1 billion is so extraordinary that it caused several accountants and lawyers consulted by The Times to blanch. The precise breakdown of that figure - specifically which Trump enterprises were responsible for how much - remains murky, hidden in a schedule attached to Trump's returns that has not become public.
But a review of public records and interviews with those who were present makes clear that it was decisions Trump made at the helm of his business empire during the 1980s that led to its nearly imploding.
Trump, the Republican nominee for president, portrays himself now as a self-made man who began life with what he has characterised as a meagre $1 million advance from his father.
That figure itself represents a significant understatement about the support his father provided him over the years. But in his darkest moment, Trump again leaned on his family's wealth, this time to ride out a financial tsunami.
At one point, the balance of his personal bank accounts was expected to drop below $1 million.
By 1990, Trump had amassed $3.4 billion in debt, much of it in the form of high-interest junk bonds. He was personally liable for $832.5 million of that.
He had bought a yacht for $29 million, the Plaza Hotel in Manhattan for $407 million and a failing airline for $365 million. All were losing money.
Details of the losses are not available, because the entities were privately held. But reviews by New Jersey casino regulators and securities filings related to debt offerings show a grim picture.
The Castle casino in Atlantic City recorded total losses of $93.2 million in 1990 and 1991. The Trump Regency hotel there lost $8.3 million in 1991. The Trump Plaza casino lost $29.2 million in 1991.
Casino regulators in New Jersey warned that "the possibility of a complete financial collapse of the Trump Organization is not out of the question." Most, if not all, of those losses would pass through to Mr. Trump's tax returns because of the ownership structure of the casinos.
The Casino Control Commission concluded in 1991 that "Mr. Trump cannot be considered financially stable, a condition for renewing his casino licenses at Taj Mahal, Castle and Plaza." Still, it did not pull the plug on him.
"The consequences of doing that would have been horrific," said Steven P. Perskie, who was chairman of the commission from 1991 to 1994. "We weren't prepared to do that unless we had no choice."
His airline, Trump Shuttle, lost $34.5 million during just six months in 1990.
In addition to actual losses from his other businesses, the nearly $1 billion total in losses probably also includes paper losses on Mr. Trump's real estate holdings through the use of depreciation rules that allow real estate developers to deduct the cost of a building over a number of years.
By the end of 1991, the amount of cash that Mr. Trump had personally available to him had fallen below $1.7 million and was expected to fall below $800,000 within months - a small cushion given his monthly expenditures.
Further squeezed by a recession, Mr. Trump fell $4.1 million behind on the property tax bill for a large swath of land he owned on the West Side of Manhattan.
The measures he promised to take repeatedly did not work, casino regulators noted. At several points, he turned to his family fortune.
He promised to make up for a cash shortfall with the sale of condominium units in Trump Tower in Manhattan. When that did not generate enough money, he filled the hole in his balance sheet with the "unforecasted receipt of funds from certain family-owned properties in New York City" - apparently referring to fees from properties his father, Fred C. Trump, had built outside Manhattan.
At the end of 1990, when Mr. Trump was facing an $18.4 million interest payment, his father sent a lawyer to the Castle casino to buy $3.3 million in chips and leave without cashing them, providing his son with an infusion of cash.
By 1993, Mr. Trump was still in dire straits. He dispatched a company executive to ask his siblings if he could borrow $10 million from their respective shares of the family trust. Mr. Trump received the loan, according to people who were involved and spoke on the condition of anonymity to avoid angering him, and went back for another $20 million the following year. Mr. Trump has denied borrowing from his siblings.
Mr. Trump had negotiated reduced interest rates on some of his loans, partially by agreeing to give up money-losing enterprises, including his airline, his yacht and a stake in the Plaza Hotel in Manhattan. His lenders forced him to live for a time on $450,000 a month.
In 1995, Mr. Trump began the transaction that would eventually free him from his financial travails. He took his struggling casinos public, selling stock to raise money and shifting his personal debt into the new company. The company continued to lose money and underperform its competitors, but Mr. Trump was paid roughly $45 million though 2009.
Mr. Wallach, who left the Trump Organization in 2001 to deal with a chronic shoplifting and theft problem, said the change in the organization was palpable. Mr. Trump began to regain his footing and focused again on real estate, taking steps to ensure that he was less dependent on his own cash and personally guaranteeing loans.
In 1996, the year that the tax records obtained by The Times were filed, Mr. Trump basked in the glow of news reports marking his apparent return from financial abyss. One such comeback article appeared in The Times in April of that year.
"This just represents the best point in my life," Mr. Trump told a Times reporter as he settled into a stretch limousine. "I think it says that what I've been doing over the years has been right."
©2016 The New York Times News Service