Donald Trump is the King of Bankruptcy filings destroying many lives along the way!

 

Donald Trump spewing his “birther-crap” again just for “attention,” is seriously defensive when asked about his bankruptcies over the past two decades. Trump’s Taj Mahal Hotel was built by Trump selling bonds to raise over 800 million dollars, then declaring bankruptcy which turned the bonds into “junk-bonds.” For all of Trump’s hyperboles about his riches, if you and I did what he has done we would be imprisoned for life years ago!

 

For legendary tycoons, Donald Trump tops the list, but how many times has Donald Trump filed for bankruptcy? The 90’s recession wasn’t picky about who it affected. Donald Trump felt the pinch as well. His decision to use high interest bonds to finance the assembly of the Taj Mahal casino caused life to get very stressful for the tycoon.

 

In 1991, unable to pay a $3.5 billion loan, he declared business bankruptcy. He also came close to filing personal ruin. At the time, his personal debt was estimated to be around $900 million. Due to the bankruptcy, banks and bondholders lost millions. They came to a compromise with Donald Trump. The banks gave him lower interest rates and a longer time frame to repay the debt and Donald Trump gave the investors half the ownership of the Taj Mahal. In mere months the casino was back in business.

 

Not even a year later, Trump Plaza Hotel folded and Donald had to declare bankruptcy. Again, he worked out a deal where he’d give up 49 percent of the hotel to Citibank and the other lenders and he’d get more time to pay the loan back. It took him two years to repay most of his debt with many sacrifices. He had to give up the Trump Shuttle.

The bankruptcy saga didn’t stop there. In 2004, Donald filed for bankruptcy protection and restructured his debt. He reduced his ownership of Trump Hotels & Casino Resorts to 27 percent and gave bondholders stocks to help lower his debt and then stepped down as CEO. In 2005, things settled down and Trump Hotels & Casino Resorts came out of bankruptcy with a new name, Trump Entertainment Resort Holdings.

 

Unfortunately the reemergence didn’t last long.  On February 17th 2009, Donald Trump filed for Chapter 11 bankruptcy with a debt ratio of $50 million in assets to his $500 million in debt. This filing made the third bankruptcy for Trump Enterprises.

Posted on: Apr. 23, 2010

 

 

Donald Trump has become infamous for telling business mogul wannabes “You’re fired!” every week on primetime television. Yet, after Trump’s casino operations filed bankruptcy for the second time this past November, many have wondered if it isn’t time for board members to give Trump a pink slip. Despite the company failings, Trump will remain as chairman and CEO and continue to collect a $2 million dollar paycheck. So…how does a CEO decide to file for bankruptcy twice and still come out at the top of the heap?

No Personal Involvement!

First, Trump doesn’t get personally involved. He knows how to protect his personal finances. In both instances, Trump’s corporations have filed for bankruptcy; Trump personally has not. Hence, when his casino fell into about a billion dollars in debt, the corporation filed for Chapter 11. Trump only made the decision to do so once he had spoken to his banks and bondholders.

But, by filing, he gave his business the opportunity to regroup and reduce his business debt. It didn’t hurt however that it would also reduce his personal debt, as Trump is likely the one every creditor would look to if the Taj Mahal couldn’t pay up. So, in fact, Trump avoided potential lawsuits from credits and he may have also avoided personal bankruptcy by keeping his own bank account insulated.

Trump, it appeared, had triumphed. His company had dire financial problems but seemed to rise just as quickly from those bankruptcy ashes. Just three years later, he combined the hotels into the publicly held Trump Hotels and Casino Resorts.

For several years, the new company enjoyed double digit stock prices. His personal fortune in turn also skyrocketed. And the man who came close to losing it all leapt onto Forbes’ most wealthy list.

Yet, Trump’s public company would eventually fall…again. Within a few years of soaring high prices, the company stock had fallen into single digits. The one-time powerhouse company remained profitless and struggled just to pay the interest on the $2 billion debt. Trump claimed that the properties were unable to make the improvements necessary for keeping up with its flashier competitors. These financial troubles led to Trump’s second trip into bankruptcy.

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