Why Donald Trump's Companies Went Bankrupt

Details About the 6 Donald Trump Corporate Bankruptcies

Donald Trump
President Donald Trump has used U.S. bankruptcy laws to restructure debt for some of his casinos. Daniel J. Barry / WireImages / Getty Images

Donald Trump has portrayed himself as a successful businessman who has amassed a net worth of as much as $10 billion. But he has also led some of his companies into bankruptcy, maneuvers he says were designed to restructure their massive debt.

Critics have cited the Trump corporate bankruptcies as examples of his recklessness and inability to manage, but the real-estate developer, casino operator and former reality-television star says his use of federal law to protect his interests illustrates his sharp business acumen.

"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,” Trump said in August 2015.

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."

6 Corporate Bankruptcies

Trump has filed Chapter 11 bankruptcy for his companies six times. Three of the casino bankruptcies came during the recession of the early 1990s and the Gulf War, both of which contributed to hard times in Atlantic City, New Jersey's gambling facilities. He also entered a Manhattan hotel and two casino holding companies into bankruptcy.

Chapter 11 bankruptcy allows companies to restructure or wipe away much of their debt to other companies, creditors and shareholders while remaining in business but under the supervision of a bankruptcy court. Chapter 11 is often called "reorganization" because it allows the business to emerge from the process more efficient and on good terms with its creditors.

One point of clarification: Trump has never filed personal bankruptcy, only corporate bankruptcy related to his casinos in Atlantic City. “I have never gone bankrupt,” Trump has said.

Here is a look at the six Trump corporate bankruptcies. The details are a matter of public record and have been widely published by the news media and even discussed by the president himself.

01
of 06

1991: Trump Taj Mahal

The Trump Taj Mahal
The Trump Taj Mahal sought bankruptcy protection in 1991. Craig Allen / Getty Images

Trump opened the $1.2 billion Taj Mahal Casino Resort in Atlantic City in April 1990. One year later, in the summer of 1991, it sought Chapter 11 bankruptcy protection because it was unable to generate enough gambling revenue to cover the massive costs of building the facility, particularly amid a recession.

Trump was force to relinquish half of his ownership in the casino and sell off his yacht and his airline. The bondholders were awarded lower interest payments.

Trump's Taj Mahal was described as the eighth wonder of the world and the largest casino in the world. The casino covered 4.2 million square feet on 17 acres of land. Its operations were said to have cannibalized the revenue of Trump's Plaza and Castle casinos.

"Your wish is our command. ... Our wish is that your experience here be filled with magic and enchantment," the resort staff promised at the time. More than 60,000 people a day visited the Taj Mahal in its opening days.

The Taj Mahal emerged from bankruptcy within weeks of its filing but was later closed.

02
of 06

1992: Trump Castle Hotel & Casino

Trump Castle Casino
This is a bed in the 'High Rollers Suite' at Trump's Castle Casino in Atlantic City, New Jersey. Leif Skoogfors/Getty Images Contributor

The Castle Hotel & Casino entered bankruptcy in March 1992 and had the most difficulty of Trump's Atlantic City properties in covering its operational costs. The Trump Organization relinquished half of its holdings in the Castle to the bondholders. Trump opened the Castle in 1985. The casino remains in operation under new ownership and a new name, the Golden Nugget.

03
of 06

1992: Trump Plaza Casino

Trump Plaza Hotel and Casino
The Trump Plaza Hotel and Casino filed bankruptcy in March 1992. Craig Allen/Getty Images

The Plaza Casino was one of two Trump casinos in Atlantic City to enter bankruptcy in March 1992. The other was the Castle Hotel & Casino. The 39-story, 612-room Plaza opened on the Atlantic City boardwalk in May 1984 after Trump struck a deal to building the casino with Harrah’s Entertainment. Trump Plaza closed in September 2014, putting more than 1,000 people out of work.

04
of 06

1992: Trump Plaza Hotel

The Trump Plaza Hotel
The Trump Plaza Hotel in Manhattan sought bankruptcy protection in 1992, about four years after Donald Trump bought it. Paweł Marynowski / Wikimedia Commons

Trump's Plaza Hotel was more than $550 million in debt when it entered Chapter 11 bankruptcy in 1992. Trump gave up a 49 percent stake in the company to lenders, as well as his salary and his day-to-day role in its operations.

The hotel, overlooking Central Park in Manhattan from its location on Fifth Avenue, entered bankruptcy because it could not pay its annual debt service payments. Trump bought the hotel for about $407 million in 1988. He later sold a controlling stake in the property, which remains in operation.

05
of 06

2004: Trump Hotels & Casino Resorts

Trump Marina
The Trump Marina in Atlantic City, New Jersey. Craig Allen/Getty Images

Trump Hotels & Casino Resorts, a holding company for Trump's three casinos, entered Chapter 11 in November 2004 as part of a deal with bondholders to restructure $1.8 billion of debt.

Earlier that year, the holding company posted a first quarter loss of $48 million, double its losses for the same quarter the previous year. The company said its gambling take was down nearly $11 million across all three casinos.

The holding company emerged from bankruptcy less than a year later, in May 2005, with a new name: Trump Entertainment Resorts Inc. The Chapter 11 restructuring reduced the company's debt by about $600 million and cut interest payments by $102 million annually. Trump relinquished the majority control to bondholders and gave up his title of chief executive officer, according to The Press of Atlantic City newspaper.

06
of 06

2009: Trump Entertainment Resorts

Donald Trump
Donald Trump flies in a personal helicopter to view some of his properties in New York City and New Jersey. Joe McNally/Getty Images

Trump Entertainment Resorts, the casino holding company, entered Chapter 11 in February 2009 amid The Great Recession. Atlantic City casinos were also hurting, according to published reports, because of new competition from across the state line in Pennsylvania, where slot machines had come online and were drawing gamblers.

The holding company emerged from bankruptcy in February 2016 and became a subsidiary of investor Carl Icahn's Icahn Enterprises. Icahn took over the Taj Mahal then sold it in 2017 to Hard Rock International, which said it was planning to renovate, rebrand and reopen the property in 2018.