When news broke that former president
Donald Trump had managed to post a $175-million bond to prevent an asset seizure while he appeals a
New York judgment that he lied about his wealth, a surprising figure turned out to be his rescuer. It was none other than
Los Angeles billionaire Don Hankey , 80, a hard-money lender who has made a fortune in financing vehicle sales to subprime borrowers — but has expanded far beyond that industry to other businesses where there is a sure profit to be made. Why does the name Don Hankey sound familiar? One of his companies, Hankey Capital, extended loans totaling more than $100 million to developer Nile Niami several years ago to complete a Bel-Air mega-mansion dubbed “The One.” The developer first marketed the 105,000-square-foot home for $500 million but it fell into bankruptcy and two years ago was auctioned off for just $141 million to Richard Sahagian, founder of L.A. fast-fashion retailer
fashion Nova. The case is still working its way through bankruptcy, but Hankey said much of what his company is owed has been paid back. Did Hankey make his fortune in real estate? No. Hankey’s wealth has its foundation in Westlake Financial Services, one of the top providers of subprime auto loans to borrowers with bad credit. The lender has a reputation for aggressively tracking borrowers, calling them if they are even a day late. In 2015, Westlake and a subsidiary that makes personal loans backed by car titles were hit with fines and refunds totaling more than $48 million for using illegal tactics to collect on loans, such as making bogus threats to file criminal charges. The companies pledged to fix their debt collection practices. Hankey has said the goal is to stop loans from going bad, not repossess vehicles, which is costly. Hankey also owns North
Hollywood Toyota and has long diversified beyond making subprime vehicle loans. Westlake has made loans for elective surgery. Other Hankey Group companies include Midway Auto Group, which rents out exotic and other automobiles, and Knight Specialty Insurance Co., a Hankey insurer that underwrote Trump’s appeal bond. Forbes pegs his net worth at $7.4 billion. Are there any previous connections between Hankey and Trump? Hankey said he is an investor in Axos Bank, a San Diego institution that refinanced
Trump Tower in 2022 for $100 million. Hankey said that he didn’t know of the refinancing until afterward and that selling Trump the bond was a business decision, though he acknowledged he is a Trump supporter. “ I voted for
Democrats in the past and I will support people who are business-friendly,” he said. So how did he get involved with Trump’s bond deal? Trump suffered a legal blow when a judge ruled in February that the former president and his company had for years exaggerated their wealth to obtain real estate loans on better terms — and must pay a financial penalty of $364 million, a figure that grew to more than $450 million with interest. Hankey said that he heard how Trump’s legal team was struggling to post such a large bond and he reached out a few days before it was reduced in size last month. “We were on a conference call and discussing a bond for the approximate size of $460 million and news came on, and one of the people said ‘We were just informed that the bond was reduced to $175 million,’” Hankey recalled. How did this deal come together? Hankey said he was later contacted about obtaining a bond for the smaller sum and he agreed to provide it. “They first came up with a list of $140 million in [investment] bonds and said the rest would be in cash. We said the bonds were acceptable to us. They were quality institutional bonds. At the end of the day when they funded, they funded in all cash,” he said. Hankey said there was more risk in underwriting the $460-million bond, but that could possibly have been completed too through a combination of cash, bonds and real estate as collateral. “I wasn’t comfortable, but I would have been happy to sit down and try to work it out. There would be a little more risk on my end, so maybe there would be a little more price involved,” he said. Hankey declined to disclose the price of the $175-million bond, which is typically a percentage of the principal, but said the margin on the bond “was very small” because “the dollar amount was large and I just don’t think there is any risk. Plus, we had collateral so we gave him a good rate.” How was Hankey able to put the deal together so fast? Hankey is considered a hard-money lender, which typically charges a steep interest rate and requires collateral that can cover a loan should it go bad. They are usually lenders of last resort or when a borrower needs money fast. Hankey Capital, the entity that lent to Niami, states on its website that it will lend as much as $300 million and can close a loan in as few as five days. Hankey said the appeal bond deal came together in just in a few days. “We had to get a lot of documents to sign but they came up with the cash right away and we have liquidity, so it was just a matter of putting the paperwork together,” he said. Has Hankey ever provided such a loan before? Hankey said he has not previously underwriten an appeal bond, but his insurance business has handled niche bonds such as for mining companies that need to ensure they will perform environmental reclamation work after mining activity stops. What happens if Donald Trump loses his appeal? Hankey said that if Trump cannot pay the judgment, the court will cash the bond in and his company will have “a day or two” to come up with money, which is sitting in an escrow account at a major brokerage. “The collateral is cash. There shouldn’t be any risk, but you never know with these things,” he said. Has he spoken to Trump about the bond deal? Hankey said he has never spoken to the former president, but he did speak to his son Eric Tuesday morning. “He called and thanked us,” Hankey said. The bond also puts on hold about $10 million in fines against Eric Trump and his brother
Donald Trump Jr., as well as former Trump Organization Chief Financial Officer Allen Weisselberg, who are also defendants, according to the Associated Press.