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#bankruptcy

3 incidents

Updated September 26, 2016 Corruption & Self-Dealing
Major Abuse of Power

Atlantic City Casinos: Six Bankruptcies, Bondholders Wiped Out, Workers Unpaid

Trump's Atlantic City casinos were overleveraged from the beginning: the Taj Mahal alone carried $675 million in junk bonds at 14% interest when it opened in 1990. When revenue fell short of the debt service requirements, bankruptcy followed. Through six rounds of bankruptcy, Trump negotiated deals that preserved his equity stake or management role while bondholders received cents on the dollar. He personally profited $82 million in salary and fees from the casinos between 1995 and 2009 while publicly traded Trump Hotels & Casino Resorts lost $1.4 billion. Trump repeatedly characterized the bankruptcies as strategic use of 'the laws of this country' and claimed he had made 'a lot of money' on Atlantic City.

Sources
3
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Updated June 21, 2016 Corruption & Self-Dealing
Major Abuse of Power

Atlantic City Casino Bankruptcies: Six Failures, Contractors and Bondholders Left Unpaid

Trump's Atlantic City ventures were financed substantially through junk bonds. The Trump Taj Mahal opened in April 1990 carrying $675 million in junk bond debt at interest rates of 14 percent; by December 1990 it was behind on interest payments. The first bankruptcy followed in 1991. Trump subsequently filed bankruptcies involving his casino holdings in 1992, 2004, and 2009. In each restructuring, bondholders and creditors took substantial haircuts. Trump negotiated to retain management fees and significant equity stakes as conditions of restructuring. He ultimately sold his remaining stake in Trump Entertainment Resorts in 2009 and 2010. Trump characterized the repeated bankruptcies as smart use of the legal system; critics noted the losses were borne primarily by investors and creditors, not Trump personally.

Sources
4
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Updated February 17, 2009 Corruption & Self-Dealing
Major Abuse of Power

Casino Bankruptcies and Junk Bond Fraud: How Trump Used Other People's Money

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.

Sources
4
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