SOME THINGS YOU PROBABLY DON’T KNOW ABOUT BANKRUPTCY AND DONALD TRUMP
PART TWO OF TWO
In the first part of this series of Articles on Bankruptcy and Donald Trump, the author explained some of the finer details of the Bankruptcy filings of Donald Trump, or specifically, his Corporations that filed Bankruptcy. Donald Trump, as he has often stated, never filed Bankruptcy personally. A number of Corporations formed by Mr. Trump have filed Bankruptcy, and Mr. Trump, in attempting a successful reorganization of these Corporations through Bankruptcy, in each case, has surrendered significant ownership in these Corporations, and has made other concessions to his Corporation’s Creditors.
Most of the Bankruptcy filings by Trump Corporations revolved around Casino and Hotel holdings in Atlantic City, a location where many Casinos and Hotels have experienced either Bankruptcy or outright dissolution, in the past decades. Atlantic City, and most of New Jersey, are difficult locations to either start of sustain businesses, and the Casinos and Hotels are not immune to the difficulties of the Atlantic City economy.
Many of Mr. Trump’s detractors will focus on the Bankruptcy Filings of Trump Corporations as indicative of Trump’s failings as a businessman. However, such suggestions discount the very important purposes of Bankruptcy Law, how Bankruptcy has helped develop the United States economy and experience as unique in the global environment, and Mr. Trump’s very significant concessions given through the Bankruptcy filings of his Corporations, in order to obtain successful reorganizations of some of his Corporations.
Before the establishment of Bankruptcy Courts in the United States, Debtors unable to pay their Creditors, were subject to Debtor’s Prisons and Involuntary Servitude. Many of the original Slaves in the American Colonies were persons from Ireland and England who were unable to pay their Creditors, and therefore were subjected to a concept called Involuntary Servitude.
Such treatment of Debtors not only is arguably immoral, but also had deleterious effects on elements of risk taking and entrepreneurialism, and on the broader economy. One is less likely to take the risks inherent in establishing a new product, invention, or business if the price of failure is either imprisonment or slavery. The Bankruptcy Laws were an instrumental part of the development of the American Economy and Dynamism because such Laws freed the Entrepreneur from the harsh consequences of failure.
Many of the great inventions that were formulated in the United States came from Entrepreneurs who failed numerous times, even filing Bankruptcy, before filing success. Without the Bankruptcy Laws, there would not be Donald Trump, as we know him, a man who has developed some of the most impressive properties, both in the United States and abroad. Mr. Trump, according to his own words, used the Bankruptcy Laws to the advantage of his Corporations, built a stronger business empire, and hired many thousands of persons. Without the benefit of the Bankruptcy Laws, none of these events would have likely occurred.
Risk taking is an essential element of economic, technological and societal development. The Bankruptcy Laws are an important facilitator of such development. The Founding Fathers understood this concept. That is why the concept of Bankruptcy Courts is enshrined in our United States Constitution.
Jay Weller is a Bankruptcy Attorney with Offices in Clearwater, Port Richey, and Lakeland, Florida. Mr Weller has practiced almost exclusively Bankruptcy Law, since 1993, and represents only Debtors. Since 1993, Weller Legal Group and Jay Weller, have represented over 40,000 Clients in Bankruptcy Proceedings, in the great State of Florida.
Image credit: Wikipedia (digitizedchaos)