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Donald Trump boasted during the debate that his businesses succeeded because of bankruptcy during the GOP debate.
Recent concern has been brought up because of the history of Donald Trump’s bankruptcies, especially after he proclaimed during the August 6 GOP debate that he has used bankruptcy laws to help his businesses succeed. He even went on to say that every business, every CEO, “virtually every person that you read about on the front page of the business sections, they’ve used the [bankruptcy] law.”
That’s not entirely false. General Motors, Chrysler and major national airlines are famous - or infamous - for declaring bankruptcy to save itself during economic trouble. Of companies with assets more than $1 billion, under 20 percent of public companies have filed for bankruptcy during the past 30 years. They’ve used the law to reorganize company structures and reduce debt.
Trump as a person has never filed bankruptcy. He has continued to amass wealth through his assets over the past several decades. His companies, however, have filed for bankruptcy four times, a mark that Bankruptcy.com shows to be the top filer of the category in the past few decades. And while his companies in Chicago, New York and other places globally have done well, his casinos in Atlantic City have been the strugglers, with each instance a Chapter 11 restructuring. This allows the casino to stay open while it eliminates debt owed to vendors and banks.
Trump doesn’t care about the filings, either. “These lenders aren’t babies. These are total killers,” he said during the debate. “These are not the nice, sweet little people.”
And over the past 25 years, he has made sure the lenders know that he’s not a baby, either.
The first time Trump’s company declared bankruptcy was with the Trump Taj Mahal in 1991. It was shortly after Trump acquired the Taj Mahal from media boss Merv Griffin and did some remodeling. This one likely was the most personal for him, as The Donald had to sell his personal yacht, a 282-foot boat, as well as his airline, Trump Shuttle. He lost half the ownership of the casino, with Carl Icahn being the largest creditor during the proceedings. Today, Icahn is Trump’s top choice for Treasury secretary.
The next year, Trump Castle Associates filed for bankruptcy. This entailed his other casinos, including the Trump Plaza Hotel in New York, the hotel and casino in Atlantic City, and the Trump Castle Casino Resort. Like the Taj Mahal, he gave half of his ownership in the New York hotel, this time to Citibank.
Twelve years passed before the next time Trump’s company ended up in bankruptcy. This time it was the Trump Hotel and Casino Resorts that filed for Chapter 11, shedding his debt in Atlantic City, plus a riverboat in Indiana. More than $500 million in debt was wiped clean and the November 2004 filing was finished come May 2005. To pay for the filing, Trump had to turn over majority control of the company, though he is the largest single shareholder.
More recently, six years ago, Trump Entertainment Resorts ended up in bankruptcy after missing a $53 million bond payment. This resulted in Trump deciding to pull out completely from the allure of Atlantic City’s casinos.
“I’ve gotten a lot of credit in the financial pages, seven years ago I left Atlantic City before it totally cratered,” Trump said at the debate regarding this latest decision.
But the casino’s problems were seemingly more to do with the location than the business. In recent years, Trump has tried to remove his name from the properties along the New Jersey shoreline, as the casinos had to file for bankruptcy again in 2014 and the gambling center of the east coast continues to falter after the Great Recession.
In other words, Trump made the business decision necessary to cut his losses before everyone else did, making the hard and smart decisions to protect his personal assets, worth more than $4 billion.
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RayHananiaINN
Hanania covered Chicago political beats including Chicago City Hall while at the Daily Southtown Newspapers (1976-1985) and later for the Chicago Sun-Times (1985-1992). He published The Villager Community Newspapers covering 12 Southwest suburban regions (1993-1997). Hanania also hosted live political news radio talkshows on WLS AM (1980 - 1991), and also on WBBM FM, WLUP FM, WSBC AM in Chicago, and WNZK AM in Detroit.
The recipient of four (4) Chicago Headline Club “Peter Lisagor Awards” for Column writing. In November 2006, Hanania was named “Best Ethnic American Columnist” by the New American Media;In 2009, he received the prestigious Sigma Delta Chi Award for Writing from the Society of Professional Journalists. Hananiaalso received two (2) Chicago Stick-o-Type awards from the Chicago Newspaper Guild, and in 1990 was nominated by the Chicago Sun-Times for a Pulitzer Prize for his four-part series on the Palestinian Intifada.
Hanania writes columns for the Southwest Community Newspaper Group including the Des Plaines Valley News, the Southwest News-Herald, the Regional News and the Reporter Newspapers.
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