Donald Trump Bankruptcies

[sgmb id=”2″]

During the CNN Republican Presidential Debate #2 on the 16th September 2015, Donald Trump stated “Every major business leader, has used the – I never went bank bankrupt, by the way, as you know, everybody knows. But – hundreds of companies, hundreds of deals, I used the law four times and made a tremendous thing. I’m in business. I did a very good job. CNN Debate transcript

Donald Trump two thumbs up
Donald Trump

Trump’s four bankruptcies were Chapter 11. A Chapter 11 bankruptcy generally allows for reorganization to keep its business alive and pay creditors over time.

Bankruptcy 1: The Trump Taj Mahal, 1991

Donald Trump racked up circa $900 million in personal liabilities in the $1 billion Trump Taj Mahal casino in Atlantic City, which opened in April 1991.

The Taj Mahal had an original budget of $1 billion, which Trump took over in 1988 on the proviso that he said that bankers were lining up to lend him money at prime rates, this meant that he could avoid risky high interest loans. On the 8th February 1988 at a licencing hearing in front of the New Jersey Casino Control Commission Trump stated “I’m talking about banking institutions, not these junk bonds, which are ridiculous”, he later added “the funny thing with junk bonds is that junk bonds what really made the companies junk.”

Trump was never able to lend moDonald Trump Quote - I didn't want to have any personal liability, so I used junk bonds. I accept the blame for that, but I would do it againney from the bankers offering prime rates, instead he was forced to turn to junk bonds, the very financial vehicle which he had told the New Jersey Casino Control Commission that he would not turn to.

Due to the need to rely on junk bonds he agreed to pay the junk bond lenders 14 percent interest, which was approximately 50 percent more than Trump had projected, to raise $675 million. Ultimately Trump could not keep pace with the associated debts of the junk bonds and was forced into a Chapter 11 bankruptcy in July 1991, just 15 months after opening.

As part of the Chapter 11 bankruptcy Trump was forced to sell off half his stake in three more casinos, his plane and yacht.

Trump ultimately said after the incident “I didn’t want to have any personal liability, so I used junk bonds. I accept the blame for that, but I would do it again.” Washington post

Bankruptcy 2: Trump Plaza Hotel, 1992

Trump acquired the Plaza Hotel in New York for $407.5 million in 1988. At the time Trump stated “I haven’t purchased a building. I have purchased a masterpiece – the Mona Lisa. For the first time in my life, I have knowingly made a deal that was not economic – for I can never justify the price I paid, no matter how successful the plaza becomes.”

After $50 million in renovations, the hotel was making a healthy profit, but this was not sufficient to make the payments of the heavy debt.

By November 1992, the Trump Plaza Hotel had accumulated $550 million in debt. As a result of the bankruptcy, Trump relinquished a 49 percent stake in the Plaza in exchange of $250 million in debt to a total of six lenders led by Citibank.

Bankruptcy 3: Trump Hotels and Casinos Resorts, 2004Donald Trump Quote - Really just a technical thing

Trump Hotels and Casinos Resorts filed for bankruptcy again in 2004 when his casinos — including the Trump Taj Mahal, Trump Marina and Trump Plaza casinos in Atlantic City and a riverboat casino in Indiana — had accrued an estimated $1.8 billion in debt. Trump agreed to reduce his share in the company from 56 to 27 percent in a restructuring plan, but he was still the company’s largest single shareholder and remained in charge of its operations.

On 27 October 2004, Trump Hotels and Casino Resorts announced that Morgan Stanley would be joint lead arranger for the $500 million financing. On November 21, the company filed for bankruptcy. Trump said the filing was “really just a technical thing.” The plan was submitted to Bankruptcy Court on 16 December 2004.

Bankruptcy 4: Trump Entertainment Resorts, 2009

Trump Entertainment Resorts was hit hard by the 2008 economic recession and missed a $53.1 million bond interest payment in December 2008. Trump ultimately signed an agreement with Avenue Capital, for which Trump received 5 percent stock in the reorganised company and another 5 percent in exchange for his name and likeness.

Donald Trump with ok sign
Donald Trump

Suggested Reading

US Politics

Donald Trump

Trump Timeline 

Trump Political History

Trump 2016 Republican Campaign

Trump 2016 Presidential Campaign

US Justice Department Sues Trump

Donald Trump Bankruptcies

John McCain is not a War Hero

Trumps Mexican Wall

Trump and Golf

Trump and Russia

Muslim Ban

Obama Wiretapping of Trump


Rise of the Planet of the Donalds

Simpsons Predicts Trump Presidency

The Liefather is the New Godfather

The Trumping

Trump and the Nine Circles of Hell

60 Unforgettable Trump Quotes

3 thoughts on “Donald Trump Bankruptcies

Leave a Reply

%d bloggers like this: