Trump's Atlantic City Casino Empire Begins to Collapse
Trump's Taj Mahal casino filed for bankruptcy, the first of six Trump corporate bankruptcies that would cost investors billions while Trump himself emerged largely unscathed.
The Taj Mahal
The Trump Taj Mahal opened in April 1990 as the largest casino in the world. Trump had financed its $1.1 billion construction largely through junk bonds carrying a 14% interest rate. Within months, the casino couldn’t generate enough revenue to cover its massive debt payments.
By November 1990, the Taj Mahal filed for Chapter 11 bankruptcy protection. It was the beginning of a pattern.
A Pattern of Bankruptcies
Over the next two decades, Trump-branded companies would file for bankruptcy six times:
- 1991: Trump Taj Mahal
- 1992: Trump Castle Hotel & Casino, Trump Plaza Hotel
- 2004: Trump Hotels & Casino Resorts
- 2009: Trump Entertainment Resorts (again)
- 2014: Trump Entertainment Resorts (final time before closure)
Who Paid the Price
While investors, bondholders, and employees bore the brunt of the losses, Trump consistently negotiated deals that protected his personal wealth and maintained his role in the companies. He collected salary and fees even as the businesses hemorrhaged money.
An analysis found that investors who bought shares in Trump’s publicly traded casino company in 1995 and held through 2009 lost approximately 90 cents on every dollar invested. Meanwhile, Trump drew at least $82 million in compensation during that period.
Sources
- How Donald Trump Bankrupted His Atlantic City Casinos, but Still Earned Millions — The New York Times, June 11, 2016
- What Trump didn't say about his four big bankruptcies — The Washington Post, August 7, 2015