Famous People Who Filed Bankruptcy
And the list keeps growing.
They all used bankruptcy to get rid of debt,…and then got on with their lives.
Each of these famous people got the full benefit of filing bankruptcy…when they needed it.
Why not you?
Bad times come to all of us…even celebrities.
If someone that well off could get into financial trouble…it could happen to anyone.
If it could happen to anyone,…maybe you shouldnt be so hard on yourself.
These famous people were given a chance……to get rid of debt…to get rid of stress…to get back on track…and to start over fresh.
Time Limits Apply To Discharges Not Bankruptcy Filings
Bankruptcy law doesnt set a minimum period that you must wait before filing for bankruptcy a second time. However, theres a catch. If you file too soon after wiping out debt in a previous case, you wont be eligible for another debt discharge .
Although there are times that it makes sense to file for bankruptcy even though you wont receive a discharge, these situations are rare . Because a bankruptcy filed too soon will end up being a waste of time and money in most cases, its essential to know how to time your bankruptcy filing.
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Trump Castle And Trump Plaza Casinos
Before he opened the Taj Mahal, Trump owned two other Atlantic City casino resorts: the Trump Castle Hotel & Casino and the Trump Plaza Casino. When the Taj Mahal opened, it became a competitor for Trump Castle and Trump Plaza. Income dropped at the older casinos. As a result, both properties filed for Chapter 11 bankruptcy in March 1992, shortly after the Taj Mahal filing.
Trumpâs three Atlantic City casinos had many of the same creditors. In some cases, two or all three properties served as collateral for the same loan. Even though each property had a separate bankruptcy case, Trumpâs negotiations with the creditors generally involved all three casinos at the same time. Trump still refers to these three cases as one combined bankruptcy. This confusion is probably why sources sometimes refer to Trumpâs four bankruptcies, instead of six.
Together, the three casinos were tied to around $3.4 billion of debt. Trump was personally responsible for about $900 million of that amount. As part of the Chapter 11 restructuring, Trumpâs creditors agreed to lower his interest rates and give him additional time to repay his debts. In exchange, Trump agreed to give up 50% of his ownership in all three casinos to his creditors. He also agreed to sell a significant chunk of his assets and turn the sale proceeds over to the creditors, including:
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Trump Never Loses Another Chance
Despite his many missteps, Trump has always rebounded and found new ways to pursue his interests. Trump shifted his business from developing projects to licensing and management deals after he had failed in the 1990s.
Trumps star rose to new heights when he was made a reality TV star as The Apprentice even though his casino business went bankrupt twice more. He capitalized on his fame to run for President in 2016, defeating two political dynasties, the Clinton and Bush families, on his way to becoming the White House.
Even if he loses in democrats2020 and experiences the same embarrassing setback as his hotel or casino failures, Trump will still be there. Trump has an extraordinary gift for selling that leads to more deals, sometimes with ex-partners who have reacted negatively to him but then warmed to him again.
Trump sued Deutsche Bank in 2008 to get some of his loan payments back. He was trying to sell condos in his Chicago tower. After two years of legal battles, the two sides settled, and Deutsche Bank began lending Trump money again in 2011. Trump likely hopes that 2020 voters will be equally forgiving.
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“The first business bankruptcy, he had a lot of personal liabilities, guarantees on the business debt, which would have wiped him out,” Connolly said. “What he did was leverage the amount of business debt to negotiate away his personal liability. And from that, he learned not to put his personal wealth at risk anymore. And so in the next three, he didn’t have any personal guarantees.”
Through the ordeal was bruising for Trump, one person involved in the case said his brand and persona helped him to retain more equity than he might have otherwise. And in true Trump fashion, he denied being too concerned about the issue anyway.
“You’ll never see me sitting in the corner sucking my thumb,” Trump told BusinessWeek at the time. “The name Trump will be hotter than ever.”
1992, Plaza Hotel
Trump bought New York’s Plaza Hotel for $390 million in 1988, promising to turn the then 81-year-old landmark into “the most luxurious hotel in the world.” He told the New York Times that his wife, Ivana, would become president of the hotel with a salary of “$1 a year plus all the dresses she can buy.”
Four years later, Trump and Ivana had split, and the hotel had millions of dollars in debt.
Trump seems to have had an inkling from the get-go that the Plaza deal may not have been the best he ever made .
Three years later, in 1995, Trump made a deal to sell the Plaza to Singapore-based international property and hotel conglomerate CDL Hotels International and Saudi Arabian Prince Walid bin Talal.
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Trump Plaza Hotel In Manhattan
At the same time that Trump was struggling financially with casinos in Atlantic City, he was also facing challenges in New York City. His Trump Plaza Hotel on Fifth Avenue was $550 million in debt and behind on its payments. The hotel filed Chapter 11 bankruptcy in November 1992.
As part of the Chapter 11 plan, Trump lost his 49% stake in the hotel. He was still allowed to call himself CEO, but he didnât have any say in the hotelâs business operations and didnât get paid. In return, Trumpâs creditors agreed to more favorable terms for the hotelâs debts.
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Trump Contractors: ‘it Was The Beginning Of The End For Us’
Trump takes umbrage at the idea that he went bankrupt, always pointing out that he never filed personally and that he used the bankruptcy laws to get richer.
Connolly said taking his casinos into Chapter 11 was “reasonable and responsible” and the right decision for Trump and his bondholders.
“It looked like a fair deal and actually kept them going,” Connolly said.
But Mike D’Antonio, author of the book “Never Enough: Donald Trump and the Pursuit of Success,” said the bankruptcies shouldn’t come with bragging rights.
“Donald likes to say his bankruptcy filings were just a tool he’s been using for his businesses,” D’Antonio said. “He’s had a string of failures. And you’re not just talking about big investors. You’re also taking about bond holders, not big banks…people who invested their retirements.
“So, you can call it a legal tool that he’s using, but lots of people have been hurt along the way. Its been a badge of shame for him.”
Personal Vs Business Bankruptcy
Theres an important distinction to be made. Trump has never actually filed for personal bankruptcy. Instead, four of his businesses have filed for Chapter 11 bankruptcy.
Taj Mahal was the first in 1991 and was followed by the Trump Plaza Hotel the next year. After over 10 years of general stability, the Trump Hotels and Casino Resorts filed in 2004 and the Trump Entertainment Resorts in 2009.
Trump claims his personal finances were only involved in the Taj Mahal Chapter 11 bankruptcy filing. This is the reason Trump has been able to come out on top after multiple filings. Not involving his personal finances in the corporations operations protected his own bank account from total ruin.
Trump understands the difference between business and personal bankruptcies quite well. If you run your own business, its important that you do too.
Filed by a business or an individual in the case that business-related debts cannot be paid. Corporations and partnerships, in which the entities are separate from the owners, may file for Chapter 7 or Chapter 11 bankruptcy.
Sole proprietorships, in which the owner is legally responsible for business-related debts, may file for Chapter 7, Chapter 11 or Chapter 13 bankruptcy.
Filed by an individual in the case that personal debts cannot be paid. Individuals typically file for Chapter 7 or Chapter 13 bankruptcy.
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Trump Has Filed For Six Business Bankruptcies
Trump, however, filed for bankruptcy regarding these companies:
Critics cite that the Trump corporate bankruptcies are examples of his inability to manage, his recklessness, and poor business acumen. Trump answers that criticism by stating he has used federal laws to protect his business interests. This idea is an example, he says, of his business insight and outstanding intelligence. Trump stated in August 2015:
I have used the laws of this country just like the greatest people that you read about every day in business have used the laws of this country, the chapter laws, to do a great job for my company, my employees, myself and my family.
In reporting from the New York Times, in 2016, Trump put up a small amount of his own money, moved personal debts to the casinos, and was awarded millions of dollars in salary, payments, and bonuses. The Times countered by sharing that the burden of his failures fell on the investors and those who bought into his business acumen self-assessment.
Three of the casino-related bankruptcies came about during the time of the early 1990s recession and the Gulf War crisis. Both of these situations made keeping Atlantic City, New Jersey gambling facilities face some hard times. At about this same time, Trump entered into a project that involved a Manhattan hotel and two casino holding companies.
Donald Trump Drove His Companies Into Bankruptcy Six Times
Three of Trumps properties filed for bankruptcy in 1992. Three other properties filed for bankruptcy one at a time in 1991, 2004, and 2009.
Trump has previously claimed that he filed for bankruptcy for four of his companies. On Day 4 of the Democratic National Convention, Michael Bloomberg said that Trump had driven six of his companies into bankruptcy. We found that Bloomberg was right, and Trump filed for bankruptcy six times.
Trumps companies have filed for Chapter 11 bankruptcy protection, which means a company can remain in business while doing away with many of its debts. The bankruptcy court ultimately approves a corporate budget and a plan to repay remaining debts often, shareholders lose much of their equity.
The Washington Post reported that Trumps Taj Mahal, which opened in April 1990 in Atlantic City, defaulted on interest payments to bondholders six months later. In July 1991, Trumps Taj Mahal filed for bankruptcy. He could not keep up with debts on two other Atlantic City casinos, and those two properties declared bankruptcy in 1992. A fourth property, the Plaza Hotel in New York, declared bankruptcy in 1992 after amassing debt.
NBC reported that 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. They had accrued an estimated $1.8 billion in debt.
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Other Unsuccessful Trump Business Ventures
As outlined by Rolling Stone in 2016, the Trump brand has been associated with many business duds. Over the years, Trump has attempted to expand into multiple markets, some tangentially related to real estate, most not at all.
During the 2016 election, one of the biggest stories was a lawsuit over Trump University, a for-profit real estate seminar series that purported to teach Trumps business techniques. Some students paid upward of US$20,000 for tuition in the pseudo-university in which Trump had essentially no role.
Despite saying he would never settle the lawsuit, shortly after winning the 2016 election, Trump did settle and agreed to pay US$25 million to former Trump University students.
Another business venture was Trump Vodka, an attempt to get into the high-dollar liquor market that completely shut down in 2011. This was an unusual endeavor because Trump has insisted throughout his career that he doesnt drink.
Other failed ventures included Trump Steaks, Trump Magazine, two nonalcoholic beverages Trump Fire and Trump Power and GoTrump.com, an attempt to get into the online travel booking industry .
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Donald Trump’s Companies Filed For Bankruptcy 4 Times
Trump still touts his business sense and wealth as qualifications for president.
Trump has built an American empire from Las Vegas to New York with towering hotels and sparkling casinos. Forbes estimates he’s worth $2.7 billion. But not all of Trump’s business ventures have been constant money-makers. In 1991, 1992, 2004, and again in 2009, Trump branded companies or properties have sought Chapter 11 protection.
“I’ve used the laws of this country to pare debt. … We’ll have the company. We’ll throw it into a chapter. We’ll negotiate with the banks. We’ll make a fantastic deal. You know, it’s like on ‘The Apprentice.’ It’s not personal. It’s just business,”Trump told ABC’s George Stephanopoulos last Thursday.
A business declaring bankruptcy is nothing new in corporate America, where bankruptcy is often sugar-coated as “restructuring debt.” But it might seem alarming to everyday Americans who can’t get a bank to restructure their home loans. If you want to get Donald Trump hot under the collar, accuse him of declaring bankruptcy.
Doug Heller, the executive director of Consumer Watchdog, said Trump is the “most egregious, almost comical example” of the disparity between what the average American faces when going through bankruptcy and the “ease with which the very rich can move in and out of bankruptcy.”
“I’m a much bigger businessman. I mean, my net worth is many, many, many times Mitt Romney’s,” Trump said.
Times Donald Trumps Companies Declared Bankruptcy
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After spending much of the millennium flirting with the idea, Donald Trump actually announced on June 16 that hes going to make a run for the Republican presidential nomination . And while that means the 69-year-old will have plenty of time to air his heady political blend of opinion and charisma, it also means that the flamboyant entrepreneur will fall under more financial scrutiny than ever before.
While hes vowed to turn over his records to the Federal Election Commission on time, one of The Donalds biggest claimsthat hes worth $8.7 billionhas already been called into question. Forbess accounting recently put the figure at $4.1 billion. Sure, that means hes still really richliterally one of the cornerstones of his runbut maybe not as really rich as he wants people to believe.
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Then there are the bankruptcy filings, which have been a leitmotif in public opera that is The Donalds long, storied business and media career. As he is quick to remind everyone, he has never actually declared bankruptcy himself. So lets clear up any confusion there, right away, with some trademark Trump indignation.
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1991, Trumps Taj Mahal in Atlantic City
2009, Trump Entertainment Resorts
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Trump Entertainment Resorts 2009
His most recent bankruptcy came in 2009, after the company missed a $53.1 million bond payment. That was pretty much the end of the road for Trump in Atlantic City. While his name remained on three casinos, he resigned from the board and gave up his remaining stake in the company.
“I had the good sense, and I’ve gotten a lot of credit in the financial pages, seven years ago I left Atlantic City before it totally cratered,” he said during the debate.
The two Atlantic City casinos that still had the Trump name filed for bankruptcy yet again in 2014. At the time Trump made sure people knew he was no longer running the company, and sued to have his name removed.