Under Attack For Bankruptcies
During the Republican primary prior to the 2016 election, Trump was not the only businessperson attempting to win the presidency, though he was certainly the one who received the most press coverage.
One of Trumpâs challengers was the former chief executive officer of Hewlett-Packard, Carly Fiorina, who used a debate performance in September 2015 to land one of the few attacks on Trump that appeared to bother him.
Discussing the issue of federal debt, Fiorina questioned if Trump was the right person to tackle the issue.
âYou ran up mountains of debt, as well as losses, using other peopleâs money, and you were forced to file for bankruptcy not once, not twice, four times.”
Trump fired back, saying it was normal for businesses to declare bankruptcy as a strategy. âI used the law four times and made a tremendous thing,â he said. âIâm in business. I did a very good job.”
After the debate, the nonpartisan PolitiFact website ran the article, âFact-checking claims about Donald Trumpâs four bankruptcies,â in which it rated Fiorinaâs statement âMostly True.â Trump had indeed declared Chapter 11 bankruptcy four times, but, the site qualified, âFiorinaâs statement doesnât tell the whole story.â
What To Know About Donald Trump Today
Donald J. Trump is running for president again, being investigated by a special counsel again and hes back on Twitter. Heres what to know about some of the latest developments involving the former president:
Documents investigation.A team hired by Mr. Trump found at least two items with classified markings at a Florida storage site, a person familiar with the matter said. The discovery came as searches were conducted after a judge directed Mr. Trumps lawyers to look for classified materials.
Georgia Senate runoff.The defeat of Herschel Walker the former football star and Mr. Trumps handpicked candidate left Republicans reckoning with questions about their path forward and trading blame for their bruising losses. Much of it landed on Mr. Trump.
Trump Organization trial.Mr. Trumps family business was convicted of tax fraud and other financial crimes by a Manhattan jury. The guilty verdict was a remarkable rebuke of the former presidents company and what prosecutors described as its culture of fraud and deception.
Termination of the Constitution.In an extraordinary antidemocratic statement, Mr. Trump suggested the termination of the Constitution to overturn the 2020 election. The explicit suggestion drew a degree of bipartisan condemnation, but many Republicans were silent.
The 39-story Harrahs at Trump Plaza opened in 1984.
From the start, the partners were at odds over its marketing and whose name should be paramount.
Others were hurt.
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
1992, Trump Plaza Hotel in Atlantic City
He Ignores Warnings And Overshoots
Trump was not aware of when to stop in Atlantic City, which led him into serious trouble. He bought the Plaza and Castle, his first two casinos. As Atlantic City casinos grew, profit margins plummeted, massive, and the market became saturated.
Experts warned Trump that he was a considerable over spender when he made his purchases.$820 million of debt. In the late 1980s, the Taj Mahal was built. Trump ignored them and focused on his optimistic assumptions.
After 16 months of the grand opening, the casino was experiencing cash flow problems and declared bankruptcy in 1991. Trump might have been content with his first two casinos and not had to file for bankruptcy in his entire career.
Trumps fear-mongering, slander and other unregulated excesses as president have been his most unregulated. Trump could have used the support of the working-class voters, libertarian businesspeople and others to win by adopting pragmatic policies that make him appear like a problem-solver.
Instead, Trump has relentlessly bullied his critics and blamed immigrants and civil-rights activists for getting in his way. Trump refused to take aggressive measures to stop the coronavirus spread, despite being advised by public-health experts. Instead, he tried to convince the public that everything was fine.
Trumps coalition now seems to be shrinking rather than expanding, as his support among women, seniors, and other key voting blocs crumble.
How Donald Trump Bankrupted His Atlantic City Casinos But Still Earned Millions
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ATLANTIC CITY The Trump Plaza Casino and Hotel is now closed, its windows clouded over by sea salt. Only a faint outline of the gold letters spelling out T-R-U-M-P remains visible on the exterior of what was once this citys premier casino.
Not far away, the long-failing Trump Marina Hotel Casino was sold at a major loss five years ago and is now known as the Golden Nugget.
At the nearly deserted eastern end of the boardwalk, the Trump Taj Mahal, now under new ownership, is all that remains of the casino empire Donald J. Trump assembled here more than a quarter-century ago. Years of neglect show: The carpets are frayed and dust-coated chandeliers dangle above the few customers there to play the penny slot machines.
On the presidential campaign trail, Mr. Trump, the presumptive Republican nominee, often boasts of his success in Atlantic City, of how he outwitted the Wall Street firms that financed his casinos and rode the value of his name to riches. A central argument of his candidacy is that he would bring the same business prowess to the Oval Office, doing for America what he did for his companies.
Many others were glad to see him go.
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Employees And Contractors Left Out In The Cold
While filing for Chapter 11 reorganization is, as Trump has said, a normal part of doing business, it doesnât wipe the slate clean for everyone. When a business fails or goes bankrupt, it can leave employees and contractors stranded without receiving payment.
So while Trumpâs purchase of Trump Shuttle initially saved or created 1,000 jobs, the positive news didnât last long for the airlineâs employees. As Trump Shuttle faltered in 1990, the company laid off 100 employees. In 1991, when the deal with Northwest failed, 160 union employees found themselves fighting to attain their earned pay and benefits.
The failure of Trumpâs casinos has frequently had ripple effects for employees. In Atlantic City, when the three Trump-owned casinos â Trump Taj Mahal, Trump Marina and Trump Plaza â went belly up in 2004, many workers lost their retirement savings. The Trump company had pushed employees to accept company stock in lieu of other retirement savings. When the stock crashed in the wake of the bankruptcy, 400 employees lost US$2 million.
In addition to being sued for discriminatory hiring practices at the Gary, Indiana riverboat casino, Trump was sued by eight business partners who said they were cheated out of money on the deal.
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Did Donald Trump Really Go Bankrupt
With the announcement of the real estate moguls bid for the United States presidency, Donald Trumps life and finances have come under scrutiny. While there are many issues to be raised with an exceptionally rich man running for President in a country suffering from the biggest wage gap and wealth inequality in history, the issue of bankruptcy surfaces repeatedly. Critics point out that Trump declared bankruptcy four times. Trump says that he has never gone bankrupt. Wherein lies the truth?
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Trump: Good Or Bad Business Record
So how are we to rate Donald Trump’s business acumen in relative terms? Is the cautious businessman who minimizes risk, rarely fails, and shows a moderate return better than the brash businessman who often takes on highly risky pursuits, strikes out a lot, but also hits his share of grand slams? That’s too subjective a question for us to answer, and the few numbers offered in this trope aren’t very informative.
It’s an oft-cited statistic that Donald Trump “has” 515 companies, but a number of those businesses are only connected to him in tangential ways and aren’t owned or directly controlled by him.
It’s also an oft-cited statistic that about 80-90% of businesses fail within the first year to eighteen months, but such numbers typically refer to startups and small businesses, while much of Donald Trump’s business empire involves expanding and building on existing large business lines and ventures.
The most important takeaway from this trope might be that you can’t sum up the world of big business. much less any presidential candidate’s qualifications, with a couple of numbers devoid of explanation or context.
Isidore, Chris. “Everything You Want to Know About Donald Trump’s Bankruptcies.” CNNMoney. 31 August 2015.
Hylton, Richard D. “1991 Money Movers Caught in the Turbulent Times of the 90’s.” The New York Times. 31 December 1991.
Harwell, Drew and Jacob Bogage. “What Trump Didnt Say About His Four Big Business Bankruptcies.” The Washington Post. 7 August 2015.
Were Watching Trumps 7th Bankruptcy Unfold
As a businessman, Donald Trump ran 6 businesses that declared bankruptcy because they couldnt pay their bills. As the president running for a second term, Trump is repeating some of the mistakes he made as a businessman and risking the downfall of yet another venture: his own political operation.
In the 1980s, Trump was a swashbuckling real-estate investor who bet big on the rise of Atlantic City after New Jersey legalized gambling there. He acquired three casinos that by 1991 couldnt pay their debts. The Taj Mahal declared bankruptcy in 1991, the Trump Plaza and the Trump Castle in 1992. Lenders restructured the debt rather than liquidate and Trump put his casino holdings into a new company that went bankrupt in 2004. The company that emerged from that restructuring declared bankruptcy in 2009. Trumps 6th bankruptcy was the Plaza Hotel, which he bought in 1988. It went bankrupt by 1992.
Trumps surprise victory in 2016 paralleled the arrival of the brash upstart in Atlantic City more than 30 years earlier. But in the fourth year of his presidency, the Trump operation is once again reeling. Voters give him poor marks for handling the coronavirus crisis, underscored by an outbreak at the White House that infected Trump himself. Democrat Joe Biden is beating Trump is most swing states and an Election Day blowout is possible. Trump has suggested he wont leave office if he loses, threatening a constitutional crisis and his own political legacy.
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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 Trumpâs 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 doesnât drink.
Other failed ventures included Trump Steaks, Trump Magazine, two nonalcoholic beverages â Trump Fire and Trump Power â and GoTrump.com, an attempt to get into the online travel booking industry .
Used Little Of Own Money
The New York Times, which conducted an analysis of regulatory reviews, court records, and security filings, found otherwise, however. It reported in 2016 that Trump “put up little of his own money, shifted personal debts to the casinos and collected millions of dollars in salary, bonuses, and other payments.
“The burden of his failures,” according to the newspaper, “fell on investors and others who had bet on his business acumen.”
‘keep The Donald Afloat’
” could have simply taken everything he had right then, but they wanted his cooperation,” said Lynn LoPucki, a bankruptcy expert and professor at UCLA Law School. “There’s that old saying, ‘If you owe your banks a little, you’re at their mercy. If you owe the banks a lot, the banks are at your mercy. They saw the best way for him to repay the money was to keep the Donald afloat.”
The Donald struck a deal with the banks to hand over half his ownership, and half of the equity, in the casino in exchange for a lower interest rate and more time to pay off his debt. He sold off his beloved Trump Princess yacht and the Trump Shuttle airplane to make his payments, and his creditors put him on a budget, putting a cap on his personal spending.
“The first one was a really big hit for him. They had him personally, and he ended up taking substantial losses in that bankruptcy. He also had the humiliation of having some bankers deciding how much money he could spend — the numbers are just astonishing — the amount of his monthly budget,” LoPucki said.
John Pottow, a bankruptcy expert and law professor at the University of Michigan, said banks would often agree to lose millions in reorganizations like Trump’s to prevent the massive losses they would incur if they foreclosed on the property.
“Banks will take considerable haircuts,” Pottow said. “It’s sort of like you have a sick patient so you cut off a couple toes to stop the gangrene. Now he’s missing a few toes, but he’s still alive.”
Trump Hotels And Casino Resorts
Just one year after the Taj Mahal deal was struck. Trump was back in court, again “restructuring” his debt. This time the Trump Plaza Hotel in Atlantic City was in the lenders’ crosshairs. Trump owed $550 million on the hotel and agreed to give up 49 percent of the hotel to Citibank and five other lenders. In return, Donald Trump was given a similar deal as before, with more lenient conditions to repay the debt. The Donald stayed on as chief executive, but his salary was taken away.
“Here’s a guy who’s failed so miserably so many times and it’s not as though he had to claw his way back after seven years in credit hell. He just said. ‘OK, this isn’t my problem anymore.’ For him, it’s just been a platform to the next money-making scheme,” said Dough Heller, the executive director of Consumer Watchdog.
In 2004 Trump Hotels and Casino Resorts Inc. filed for voluntary bankruptcy after accumulating $1.8 billion in debt. The Donald agreed to reduce his share in the company from 47 percent to 25 percent, meaning he no longer had control over the company. The deal also included lower interest rates and a $500 million loan to make improvements.
“In 2004 is where he lost control of his name. One rule when you have a name like Trump is you never let anyone own it and control it. He got into such a bad spot here that he ended up with others owning and controlling his name. They can do what they want once they own it,” LoPucki said.
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Fact Checking: Donald Trump Has Filed Bankruptcy Six Times
The Differences Between Bankruptcies: Chapters 7, 11, and 13
Recently, I met a prospective client with over $30,000.00 in medical debt. She lives with her one minor child and her annual household income around $40,000.00. She can pay her basic bills, but the massive medical debt is a different story. The collection phone calls are picking up and her stress level is beginning to affect her health. This same woman filed for Chapter 7 bankruptcy relief 6 years ago following a job loss, meaning that she would not be eligible for another Chapter 7 bankruptcy filing for 2 more years. She looks at me and says If our President can file bankruptcy whenever he gets into a pinch, why do I have to suffer for 2 more years? She recalled a news story saying that President Trump had filed bankruptcy at least four times prior to becoming our U.S. President.
Fact Checking: Has Donald Trump filed for bankruptcy relief 4 or 6 times?
Lets do some fact checking about how many times Donald Trump has filed for bankruptcy protection and why there is some debate over this number. During the 2016 presidential campaign, Hillary Clinton correctly pointed out that Donald Trump had filed bankruptcy 6 times. Here is a quick breakdown of the six Chapter 11 bankruptcy filings by companies owned by Donald Trump. All six of Donald Trumps bankruptcy filings were prior to him becoming our current U.S. President.