Presidential hopeful Donald Trump has been criticized for his brushes with bankruptcy on more than one occasion, including a few questions during his recent debate. A common question being, “how can he still be worth so much after filing bankruptcy so many times?” The answer is that he has never filed bankruptcy; at least, not personal bankruptcy. The fact is that Trump has only ever filed for business bankruptcy.
First, let’s go over the history. Mr. Trump first earned a lot of that money in the casino business. His hotel and casino properties, The Trump Taj Mahal and Trump Plaza, filed separate corporate bankruptcies in 1991 and 1992 respectively. These two companies, along with Trump Marina (now the Golden Nugget), reorganized into one entity, Trump Hotel & Casino Resorts. This umbrella company held onto the debts (about $1.9 billion) of the original properties, and eventually fell under that same pressure in 2004. After renaming again to Trump Entertainment, the company filed yet again during the 2009 economic downfall. After that, Trump elected to step away and let someone else give it a try. His substitute, Carl Icahn, also failed to get the company back to par and filed one more time last year, this time with Trump on the sidelines.
Trump has managed to come out on top each time and has maintained a steady increase in net worth. He is now estimated to be worth around $2.7 billion, although he claims it’s much more. Trump’s distaste for lenders is well-known, but his ability to make a deal with them is legendary. He has managed to work out solutions with lenders that not many would have snowball’s chance at; all while keeping his name and wealth relatively unscathed.
However, the enduring question remains: how should we view Trump’s 20-year bout with corporate bankruptcy in light of his presidential campaign? Should his uncanny ability to make a deal outweigh his apparent inability to keep his businesses afloat?
Garland & Mason, L.L.C. – New Jersey bankruptcy lawyers