SOME THINGS YOU PROBABLY DON’T KNOW ABOUT BANKRUPTCY AND DONALD TRUMP
PART ONE OF TWO PARTS
There has been much recent mention in the mainstream news and among other political opponents of Donald Trump, namely Carly Fiorina, of the numerous Bankruptcies that Donald Trump was involved. Although Donald Trump never personally filed Bankruptcy, a number of Corporations in which Donald Trump had majority control and ownership, filed Bankruptcy, specifically Chapter 11 Bankruptcy.
Trump Corporations have filed Bankruptcy four times. Each Bankruptcy involved Trump Resorts, Hotels and Casinos located in the Atlantic City area, in New Jersey. Mr. Trump has, on numerous occasions, defended the Bankruptcies, stating that his Enterprises were victim to the general economic malaise that has befallen New Jersey, and Atlantic City, in particular. Trump’s Corporations in Atlantic City are not the only Hotels and Casinos in Atlantic City that experienced severe financial hardship. Trump further defends his position by touting his good timing in removing himself and his business efforts away from Atlantic City, before Atlantic City descended much further into economic disaster.
In addition, Mr. Trump will often mention that although a number of his Atlantic City projects did file Bankruptcy, most have experienced successful restructuring, which is unusual for Corporations that file Chapter 11 Bankruptcy, and he has hundreds of other business ventures that have been successful.
One aspect of Mr. Trump’s Corporate Bankruptcies that he has not mentioned in his defense, is that Mr. Trump has suffered personally from the Bankruptcy Reorganizations that his Corporations have entered. Often, when a large Corporation files Bankruptcy, in particular a Chapter 11 Bankruptcy, the Officers of the Corporation do not endure personal financial hardship because of the filing of the Bankruptcy. The Corporation itself is often subject t o financial restraint because of the Bankruptcy, but the individual Officers, such as the President, Vice President, etc., often are able to continue in their functions, often without a decrease in income or benefits.
Each of the Bankruptcy filings of Trump Corporations have resulted in the diminution of Mr. Trump’s wealth, at least as it applies to the Corporations that filed Bankruptcy.
The 1991 Trump Taj Mahal Bankruptcy was the Bankruptcy in which arguably, Trump suffered the most personally. Although the Taj Mahal Bankruptcy was a Corporate, Chapter 11 Bankruptcy, Trump had personally guaranteed a number of the Debts held by the Corporation. In the Bankruptcy, Trump sold his 282 foot yacht and his Trump Shuttle Service (Airline), and relinquished one-half ownership in the Taj Mahal, as part of the restructuring of the Corporation.
Image credit: MichaelVadon