Donald Trump

Although Donald Trump, the 45th President of the United States, never filed personal bankruptcy, companies that he owns, or controls have filed chapter 11 proceedings six times. In chapter 11, the owners of companies are permitted to continue operating their businesses while cancelling much of their debt. A bankruptcy judge must approve a repayment plan, but many creditors [including smaller local companies that provided the labor and materials to build properties] and even equity owners, often must absorb significant losses under approved plans.

Amid great fanfare, Trump opened the Taj Mahal Casino in Atlantic City in April 1990 but within a year it was broke and unable to meet debt service obligations. It filed bankruptcy in July 1991. Two other Trump-owned Casinos in Atlantic City went broke shortly thereafter and each filed its own chapter 11 proceeding in 1992.The Plaza Hotel, a Trump-owned hotel in New York City, also filed bankruptcy in 1992 after amassing huge amounts of debt.

In 2004, Trump Hotels and Casinos Resorts filed bankruptcy after accumulating more than $1.8 billion in debt. And in 2009, Trump Entertainment Resorts also filed. Although incorrect, Trump told reporters that he considered the first three bankruptcies to be one case, which explains why he believes that his companies have only filed four, as opposed to six, times.

From 2005 until 2010, Trump promoted “Trump University” where he promised to share his “secrets to success” in the real estate business to students, for a price. The students alleged the school was a sham and filed a class action seeking to get their money back plus damages for fraud. Although TU did not file bankruptcy, Trump, after vowing to fight the allegations of fraud “to the end” during his campaign, quickly settled after he won the election and paid $25 million back to students, which represented 80 to 90% of their “tuition”.