Who is Don Hankey, the L.A. billionaire who financed Donald Trump’s appeal bond?

Laurence Darmiento April 3, 2024

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

in order to obtain favorable real estate loans

, a surprising figure turned out to be his rescuer.

It was none other than Los Angeles billionaire Don Hankey,

80,

a

hard money 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 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 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

already

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 an

d 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. T

he 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.The opportunistic

Hankey

also owns North Hollywood Toyota

and has long diversified beyond making subprime vehicle loans. Westlake has made loans for elective surgery. Other

companies

Hankey Group companies include Midway Auto Group, which rents

out

exotic and other automobiles, and Knight Specialty Insurance Co., a Hankey insurer

which that underwrotesold

Trump’s

the

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

s

and that

the

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,'”

recalled

Hankey

recalled, who said he was thanked but the call terminated discussions

.

How did this deal come together?

Hankey said he was

later

contacted

four days ago

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

(owned by Trump and his businesses)

and said the rest would be in cash. We said the bonds were acceptable to us. They were quality institutional bonds

and the rest would be in cash

. 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 $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.

Hanked Hankey

declined to disclose the price of the

$175 million $175-million

bond, which is typically

measured as

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

loan up to 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

mitigation 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

currently

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

,this 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.