Donald Trump Bankruptcy
Donald Trump Bankrupt
Donald trump bankruptcy. How Donald Trump became bankrupt, then rose to billionaire status again.
In the early 1990s, Donald Trump started running into serious financial problems. He was overextended personally and with his business. On a personal level, his extramarital affair with Marla Maples led to his divorce with his first wife, Ivana Trump. On a business level, beside his real estate developments, Donald Trump also expanded into the airline industry by buying the Eastern Shuttle routes, bought the Atlantic City casino business and the Taj Mahal Casino business. Financial problems with his ventures led him to declare business bankruptcy, and he had to go through a creditor-led bailout.
Because the banks and bond-holders had already lost so much money, they allowed Trump to restructure his debt – this prevented the risk of these creditors losing more money if they take him to court. For example, with the Taj Mahal, Trump ceded 50% ownership in the casino to the casino’s initial bondholders; in return, he received lower interest rates on his debt and had more time to pay back. Taj Mahal emerged from bankruptcy in late 1991.
However, Trump rose to prominence again in the late 1990s. He completed Trump World Tower in 2001; he also developed Trump Place and Trump International Hotel and Tower. The publicly held Trump Hotels and Casino Resorts was worth more than $35 per stock in 1996.