{"slug":"trump-casino-casino-bankruptcies-fraud","title":"Casino Bankruptcies and Junk Bond Fraud: How Trump Used Other People's Money","date":"1990-11-21","lastUpdated":"2009-02-17","description":"Between 1991 and 2009, Donald Trump's Atlantic City casino businesses filed for Chapter 11 bankruptcy protection six times. The bankruptcies were not business failures in the ordinary sense — Trump had structured his casino deals to personally profit while loading the companies with junk bond debt. When the debt crushed the companies, bondholders and creditors lost billions while Trump retained his name, fees, and management contracts. Financial analysts described the structure as designed to let Trump extract value while others absorbed the losses.","summary":"Trump's Atlantic City casinos — the Taj Mahal, Plaza, Castle, and related entities — were financed with junk bonds carrying interest rates of 14-17%, which were unsustainable given the revenue the casinos could generate. Trump had collected hundreds of millions in management fees, licensing fees, and development profits before the bankruptcies. When the companies collapsed, thousands of bondholders, including retirees who had purchased the high-yield bonds, received pennies on the dollar or nothing.","category":"corruption","severity":"major","ongoing":false,"sources":[{"url":"https://www.nytimes.com/2016/06/11/nyregion/donald-trump-atlantic-city.html","title":"Donald Trump's Business Decisions in Atlantic City Echo in Battered City","publisher":"The New York Times"},{"url":"https://www.washingtonpost.com/politics/how-donald-trump-bankrupted-his-atlantic-city-casinos-but-still-earned-millions/2016/06/11/0d2b5f40-2d64-11e6-9b37-42985f6a265c_story.html","title":"How Donald Trump bankrupted his Atlantic City casinos but still earned millions","publisher":"The Washington Post"},{"url":"https://www.nytimes.com/interactive/2016/06/11/nyregion/trump-atlantic-city.html","title":"Timeline: Trump's Casino Empire","publisher":"The New York Times"},{"url":"https://www.propublica.org/article/trumps-bankruptcy-mountain","title":"Trump's Bankruptcy Mountain","publisher":"ProPublica"}],"draft":false,"status":"published","tags":["bankruptcy","casino","Atlantic-City","junk-bonds","pre-presidency","corruption","fraud"],"relatedEntries":[],"timeline":[{"date":"1990-01-01","title":"Taj Mahal financed with 14% junk bonds","summary":"The Trump Taj Mahal casino, under construction in Atlantic City, is financed with $675 million in junk bonds carrying a 14% interest rate. Financial analysts including Marvin Roffman of Janney Montgomery Scott publicly warn that the casino cannot generate enough revenue to service the debt — and is therefore guaranteed to fail. Trump has Roffman fired from his firm."},{"date":"1990-11-21","title":"Trump Taj Mahal files Chapter 11","summary":"Less than a year after opening, the Trump Taj Mahal files for Chapter 11 bankruptcy protection — the largest casino bankruptcy in Atlantic City history at the time. Bondholders receive reduced claims. Trump negotiates to retain his management contract and reduced ownership stake."},{"date":"1992-01-01","title":"Trump Castle and Trump Plaza file bankruptcy","summary":"Two additional Trump casino entities file for bankruptcy protection. In three years, Trump's entire Atlantic City casino empire has been through Chapter 11."},{"date":"2004-11-01","title":"Trump Hotels and Casino Resorts — fourth bankruptcy","summary":"The consolidated Trump casino company files for Chapter 11 protection again. Trump's stake is diluted further; bondholders take additional losses. Trump retains management role."},{"date":"2009-02-17","title":"Trump Entertainment Resorts — sixth and final bankruptcy","summary":"Trump Entertainment Resorts files its sixth bankruptcy. This time, Trump is removed from day-to-day management. The company's assets continue to decline; the Taj Mahal eventually closes permanently in 2016."},{"date":"2016-06-11","title":"Washington Post documents Trump's personal gains during casino failures","summary":"The Washington Post documents that while Trump's casino companies lost more than $1 billion, Trump personally received over $82 million in salary and bonuses from those same companies over the period — demonstrating the structural design that let him profit while the companies failed."}],"location":{"name":"Atlantic City, NJ","lat":39.3643,"lng":-74.4229},"custom":{"era":"pre-presidency","posture":"reported","warCrimeClassification":"enabling","internationalLaw":[],"iccRelevance":false,"victims":"Bondholders who lost billions when Trump's casinos bankrupted; contractors and workers left with unpaid claims in reorganization; pension funds and small investors who purchased high-yield Trump casino bonds","structuredPerpetrators":[{"name":"Donald Trump","role":"Owner and controlling interest; extracted management fees and profits before bankruptcies","institution":"Trump Hotels & Casino Resorts"}],"updateLog":[{"date":"2016-06-11","summary":"Updated with Washington Post documentation of Trump's personal gains during casino failures."}]}}