Chubb seems to think loaning TSF $91M is a "sound investment"

[maxrandb]

Do you think we should show them it's not?

44 votes, 1 pass | Time left: Time expired
	Is loaning a rapist facing 91 felonies a sound business practice?
	1 (2%)
	Will Chubs CEO be nominated for a Medal of Freedom by TSF
	2 (5%)
	Should Chubs next act be managing the Social Security Trust Fund?
	0 (0%)
	This Stinks to High Heaven
	41 (93%)
	1 DU member did not wish to select any of the options provided.
Show usernames Disclaimer: This is an Internet poll

[jimfields33]

1. I'm not voting but it's their money. If they are dumb

enough to loan it to him, then they can see what happens. He won’t pay it back. No skin off any of our backs. Who even heard of the place before this? If it closes down due to this , nobody would miss it,

[maxrandb]

6. Is it their money, or do they have a fiduciary obligation to their shareholders?

[brooklynite]

8. Who ever heard of WHAT place?

Chubb is an extremely well known insurance firm. We have our homeowners with them.

[jimfields33]

13. I have USAA. Yours must be regional.

[MichMan]

14. Hardly regional

Chubb is a world leader in insurance. With operations in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. As an underwriting company, we assess, assume and manage risk with insight and discipline. We service and pay our claims fairly and promptly. We combine the precision of craftsmanship with decades of experience to conceive, craft and deliver the very best insurance coverage and service to individuals and families, and businesses of all sizes.

Chubb has more than $225 billion in assets and reported $57.5 billion of gross premiums written in 2023. Chubb’s core operating insurance companies maintain financial strength ratings of AA from Standard & Poor’s and A++ from A.M. Best.

Chubb Limited, the parent company of Chubb, is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index.

Chubb maintains executive offices in Zurich, New York, London, Paris and other locations, and employs approximately 40,000 people worldwide.

https://about.chubb.com/

[Kid Berwyn]

22. Evan Greenberg is son of late AIG chair Maurice "Mo" Greenberg.

Last edited Sat Mar 9, 2024, 02:20 PM - Edit history (1)

Who thanked the US taxpayer for the $280 billion dollar bailout loan for keeping AIG afloat in 2008.

Edit: typo

[MichMan]

24. The poster I replied to had never heard of them, and suggested they were a small regional outfit

Whom the current CEO is related to has no relevance to my reply

[Kid Berwyn]

36. Sorry, didn't mean to confuse you or the issue.

Here's some historical background for those who are interested in context from today's news:

The Banksters who Stole Uncounted Trillions Should PUT IT BACK.

https://www.democraticunderground.com/10025093415

[MichMan]

38. I'm not confused

I understand how insurance works

[Kid Berwyn]

42. That's why I posted the father-son nepotistic side of big money.

It seemed you didn't know about the cross-generational connection and how it influences government policy and who gets money.

[MichMan]

43. Thanks for connecting the dots

Got it.

Chubb agreed to providing Trump's bond because the father of their CEO, who worked for a completely different insurance company, received a taxpayer bailout 16 years ago, that was passed by both chambers of Congress (each controlled by opposing parties), and which was subsequently paid back in full by AIG with 22 billion in additional interest to the government.

I never would have known that was what drove this agreement 16 years later. Good to know

[brooklynite]

23. No, niche.

They're primarily commercial but they also do single family townhouses.

[Ocelot II]

32. Then if you make a claim you'll be getting money from Russia!

Didn't you know that Chubb does business with the Kremlin??? It's all over the Internetz!

and

[Gidney N Cloyd]

18. Chubb is a frequent underwriter of a lot of PBS shows.

[maxrandb]

20. So are the Koch brothers

[Gidney N Cloyd]

21. My point is that they're well known, not that they're angels.

[Historic NY]

2. Considering the CEO was a TRump WH advisor

https://newrepublic.com/post/179692/idiot-back-trump-bond-e-jean-carroll-trial-evan-greenberg]

[Squaredeal]

3. If it's morally wrong, you shouldn't do it.

Even if you’re hiding behind some company name to “legitimize” your behavior . Unfortunately, many Americans don’t have a conscience and will prey on their fellow citizens because the dollar is their only flag in life.

[cloudbase]

4. They've been in the business for a long time.

They no doubt have the whole amount (and then some) covered by collateral. For them it's strictly a business transaction.

[CincyDem]

5. Depends on the interest rate and collateral. Insurance companies are very (very) good at pricing "risk"

Insurance is the business of buying/selling "risk" so it's not surprising that he'd reach into the insurance industry for the money. In effect, they're acting as his bail bondsman. And relative to Chubb's balance sheet, the reality is if they lose 100%, they probably won't notice it.

While the morals might be questionable, to quote Tessio in the Godfather..."Mike, it's just business".

Interest rate

They'll start with the risk free rate, usually the current Federal Funds rate...5.5%. That's what they can get on their money today without taking any risk.

From there, they'll add several factors to get a final rate on the note. Probably a hard money factor (i.e. borrower is strapped for cash)...call it +4-5%. Then they'll add a business risk factor where they'll consider the borrower's likely ability (and in this case willingness) to repay the loan. I've seen business risk factors upwards of 8-10% and there's no reason to believe Trump would get substantially lower...but let's just say Chubb's got some kind of political calculus in this so they give him a deal at 6%.

Net, he's probably got a 15-16% rate on the note. Probably no lower but possibly much higher.

Collateral

When you get a mortgage and borrow money from the bank, your house is the collateral. You put down 20%, they loan you 80% BUT...if you default, they take 100% of the house...you're collateralized at 125% (i.e. the bank lends you 80 but they recoup 100 on default for a gain of 20 on their 80...25%). Depending on how easy it is for the bank to turn that collateral into cash and their view of what the market might be for that collateral over the life of the loan, they could easily want 150-200% collateral...but let's say Chubb's got that same political calculus here and they give it to him a deal...150%

So...in round numbers...Chubb loans $90million, gets a little over $1million/month in interest (maybe more) and holds $135million in collateral. For an insurance company that usually makes 4-5% on their money...15% if he pays and 8-9%/year if he defaults is a good deal for them. After court fees to recover collateral if he defaults, they probably net 6% or so on their money worst case...not a bad deal for them.

We'll likely never know the inner workings of the deal but I guarantee you, Chubb has priced in every risk and it's a good business deal for them.

IMHO.

[maxrandb]

9. What's to stop them from just forgiving the loan?

As I have said before; "$91M is peanuts for the most powerful office on the planet".

Besides, we know that if Donnie Dipshit followed the laws, norms and respected business practices, this transaction would be the first time in his entire life that he has done so.

I am all out of "benefit of the doubt" for this fucking asspickle.

[NanaCat]

12. One word: Shareholders

They have a fiduciary responsibility to their shareholders not to make a bad loan.

I can just about guarantee that they got some serious collateral to back up a loan to this deadbeat. Most likely properties that are worth 90whatever million with TSF's name on them, but far more valuable without that stain of iniquity.

I have a feeling they will come out way ahead on the deal. Well-established insurance companies are always good at that.

[CincyDem]

16. IMHO, nothing. But that's a separate business decision

The OP was about this decision and I’m sure they structured it to come out on top.

If, for whatever reason, the choose to forgive it in the future, that may or may not be a good business decision but it doesn’t make this one bad.

Certainly, whoever funds these penalties is going to have 24/7 access to The Oval if he wins in November, probably have a WH badge to go with it. Just one more reason to keep JRB on the job.

[onecaliberal]

26. IMO he was already repaid with very valuable information.

[Ocelot II]

31. It's not a loan. It's insurance.

[Ocelot II]

34. Again, it's not a loan, it's insurance.

[onenote]

27. I doubt the cost of getting the surety is anywhere near 15%.

Last edited Sat Mar 9, 2024, 01:18 PM - Edit history (1)

I've dealt with appeal bonds on multiple occasions in my forty-plus years as an attorney and none of them have had costs that high, even when the recipient of the bond doesn't have assets close to those Trump has.

A couple of examples: in a patent infringement case, Ericsson won a judgment of over $132 million against TCL Commc'n Tech. The cost of the supersedeas bond obtained by TCL to stay paying that judgment pending appeal was $1,124,491.74/year - less than 1 percent. And the cost of the corporate guarantee paid to get the supersedeas bond was around $600,000 --- for a total of around 1.3%.

Another example: in the Exxon Valdez litigation, the original award of damages was $5 billion dollars. Exxon paid $60 million to obtain a supersedeas bond pending its appeal -- around 1.2%

While Trump may have paid more than that, there is no chance he paid 10 times that amount. And E. Jean Carroll should be very concerned if Trump did pay a lot more than that because, heaven forbid, Trump wins his appeal, she could be on the hook to reimburse Trump for the cost of obtaining the supersedeas bond. See Federal Rule of Appellate Procedure 39 ( e ):

e) Costs on Appeal Taxable in the District Court. The following costs on appeal are taxable in the district court for the benefit of the party entitled to costs under this rule:
(1) the preparation and transmission of the record;
(2) the reporter's transcript, if needed to determine the appeal;
(3) premiums paid for a bond or other security to preserve rights pending appeal; and
(4) the fee for filing the notice of appeal.

[Hugin]

7. Fool.. money... parted... Yada... Yada. n/t

[ProfessorGAC]

10. Passing

They're in the business if managing risk, not risking money.
I'm positive the loan is offset by assets.
Chubb is not losing money of this deal.
More than likely the interest will exceed line if credit rates insurance companies use to make short term loans.
Insurance companies are not in the business of losing money, except in uncontrollable circumstances like a natural disaster.
This situation is not uncontrollable.

[NameAlreadyTaken]

11. Should we call him Chubby?

[Silent Type]

15. Assuming trump loses his appeal, it will be fun watching either the government or Chubb going after trump's assets.

[Vinca]

17. They'll lose their money just as Mike Lindell has lost his money in service to the wannabe dictator.

[Ocelot II]

29. No, they won't. They wouldn't have written the bond if they thought they would.

[keithbvadu2]

19. Chubb probably has a very heavy collateral contract.

[onenote]

25. Not voting, but it is virtually certain that Chubb will not lose money on this surety.

Folks who think Chubb shouldn't provide Trump with an appeal bond either don't understand how such bonds work or, for some reason, don't want E. Jean Carroll to get the money awarded to her if and when Trump's appeal is denied.

[Ocelot II]

37. These threads are driving me nuts - some people still seem to think an appeal bond is a bad thing -

notwithstanding repeated efforts to explain how they work - and that TFG shouldn't have been "allowed" to obtain one. Should Carroll have been left to her own devices to try to collect the judgment when doing so would be expensive, slow, and possibly fruitless, when an appeal bond will absolutely protect her and ensure that she'll get paid automatically if (when) she wins the appeal? Why should we even care whether a gigantic insurer which is in the business of issuing this kind of insurance, knows how to evaluate the risks, and prices it accordingly, loses money (they won't; insurance companies aren't in the business of losing money)?

[Ocelot II]

28. It isn't a loan. It's insurance. Doesn't anybody understand how this works?

The purpose of an appeal bond is to protect the winning party in a lawsuit if the losing party appeals. The bond allows the money to be paid out automatically if the appeal fails, and the court rule exists so the losing party is deterred from appealing just to delay having to pay the judgment. If TFG hadn't obtained the bond Carroll could have executed on the judgment immediately, but this isn't as easy as it sounds. It would be expensive, slow and difficult, and TFG would throw everything he had at avoiding or at least delaying paying, including hiding or transferring assets. An appeal bond makes all that unnecessary and she is assured of being paid the full amount.

During the appeal process (while post-judgment interest continues to accrue) the insurer isn't out any money, while the appealing party, in order for the insurer to write the bond, has had to either pay a stiff cash premium or collateralize assets in the amount of the judgment. Insurance companies aren't in business to lose money, as anyone who has ever dealt with one must know. They would have evaluated the risk of loss, which in this case is considerable, and priced the bond accordingly. They won't lose money no matter what happens, because the way all insurance works is by pooling risks. If there is a loss in this case it will be offset by premiums from the other cases where the insurer didn't have to pay out.

I don't understand why everybody has their undies in a bunch about this. Specialty insurers like this Chubb Group subsidiary are in the business of selling appeal bonds, and insuring large verdicts like this isn't unusual at all, especially in commercial litigation where most civil appeals occur. This is normal, people, even if the appellant isn't.

Also, the money isn't coming from Russia.

[MichMan]

33. Can't confuse people with logic when it disputes their agenda

[Zeitghost]

41. "Doesn't anybody understand how this works?"

The answer appears to ; very few.

[Diraven]

44. Yeah, but

It's still stinky if they don't actually think he can win his appeal but they give him a sweet deal on the insurance anyway in return for later favors when he wins the election.

[RainCaster]

30. A fool and it's money are soon parted

I will enjoy seeing the articles about how Trump refuses to pay back that money. Delay, delay, delay.

[Ocelot II]

35. It's out of his hands once the bond is issued. Carroll gets her money

and the insurer gets whatever it's entitled to - probably collateralized. The risk would have been priced into the contract in any event.

[onenote]

39. Moreover, if, heaven forbid, Trump prevailed in his appeal, Chubb gets to keep the premiums it received and Trump

can try to recover them FROM CARROLL under Federal Rule of Appellate Procedure 39( e ):

(e) Costs on Appeal Taxable in the District Court. The following costs on appeal are taxable in the district court for the benefit of the party entitled to costs under this rule:
(1) the preparation and transmission of the record;
(2) the reporter’s transcript, if needed to determine the ap- peal;
(3) premiums paid for a supersedeas bond or other bond to preserve rights pending appeal; and
(4) the fee for filing the notice of appeal.

[sakabatou]

40. If he thinks Dump will pay him back, he's an idiot