You may have heard that business mogul Donald Trump filed for bankruptcy. Again.
While this isn't a personal filing, Trump is no stranger to bankruptcy. In February 2009, Trump's casino company, Trump Entertainment Resorts, Inc., filed for bankruptcy for the third time. But this time, Trump and his daughter Ivanka quit before the actual filing.
Since the second bankruptcy filing in 2004, Trump has only owned about a quarter of the casino operation, although he continued to serve as Chairman of the Board until February. According to the court filing, the company had $2.06 billion in assets and more than $1.74 billion in liabilities. In order to save the company, Trump made an offer to buy the company and take it private. But he claims that bond holders and "their allies on the board" refused his offer. When the offer was refused, the Trumps walked.
Trump says, "I have nothing to do with [the bankruptcy]. I have nothing to do with the company. I am not involved in the management of the company. I'm not on the board any longer," (FOX News, February 18, 2009).
Ultimately, the casinos will stay open for business. At least one of the casinos will be sold in the spring to a company led by Richard Fields, a former protégé of Donald Trump. Trump has also hinted that he may take action to have his name removed from the casinos (Huffington Post, February 17, 2009).
What about Trump's other properties? Trump International Hotel & Tower project in Chicago is likewise in trouble. Sales were much lower than expected in the 339 hotel rooms and 486 condominium units. Therefore, Trump and his partners have fallen short of the $100 million capital needed to pay off the senior first loan. But Trump and the partner banks have reached a deal with their lenders; they now have until May 2009 to figure out a solution (BloggingStocks, March 4, 2009).
And is all this going to stop Trump? As he explained to FOX, "I just bought something in Washington, a big project in Washington. Just bought a big project in New Jersey. It is a great time to be buying. I'm going to be watching very, very carefully what happens as the time goes by," (FOX News, February 18, 2009).
Sources:"Trump Casino Group Files for Bankruptcy" Neil Cavuto interview. FOX News, February 18, 2009.
"Donald Trump's Casino Company Files For Bankruptcy" by Wayne Parry. Huffington Post, February 17, 2009.
"Donald Trump reaches a truce with lenders" by Zac Bissonnette. BloggingStocks, March 4, 2009.