Meet The Small Business Owners Stiffed By Donald Trump
Donald Trump has ticked off a whole lot of different groups during his outspoken and unconventional run for the presidency. Few small business owners are among them.
Back during the primaries when he was an unlikely challenger to a slew of other more mainstream Republican candidates, Trump managed to attract the support of a whopping 41 percent of small business owners despite the crowded field. Even after a year of gaffes and controversy, more recentpolls suggest small business owners remain among Trump’s most stalwart supporters.
But there are some interesting and very vocal exceptions — the many small business owners Donald Trump has stiffed in his long career as a real estate tycoon.
Recently several media outlets have dug up a handful of business owners with worrying tales to tell of Trump’s bullying, unfairness, and failure to pay. And while their numbers aren’t huge, there are enough of them to suggest a pattern of behavior that raises questions about whether pre-politics Trump was much of a friend to small business in practice. Here are a few of their stories:
The Trump Entrepreneur Initiative
The now-defunct Trump Entrepreneur Initiative was once known as Trump University. The for-profit education company offered courses in real estate, asset management, entrepreneurship, and wealth creation.
The company was not an accredited school and did not offer high school or college credits.
The company was embroiled in an ongoing, high-profile scandal during Trumps presidential campaign, and it continued into his tenure as president.
The Trump Entrepreneur Initiative faced a lawsuit in 2013alleging illegal business practices. The New York state attorney general filed a $40 million civil suit that alleged the corporation made false promises to its students.
A New York judge found Trump personally responsible. In late March 2017, when Trump was serving as president, a judge approved a $25 million settlement for the defrauded students.
Admirably Tough Or Downright Slimy Your Call
Donald Trump has ticked off a whole lot of different groups during his outspoken and unconventional run for the presidency. Few small business owners are among them.
Back during the primaries when he was an unlikely challenger to a slew of other more mainstream Republican candidates, Trump managed to attract the support of a whopping 41 percent of small business owners despite the crowded field. Even after a year of gaffes and controversy, more recentpolls suggest small business owners remain among Trumps most stalwart supporters.
But there are some interesting and very vocal exceptions the many small business owners Donald Trump has stiffed in his long career as a real estate tycoon.
Recently several media outlets have dug up a handful of business owners with worrying tales to tell of Trumps bullying, unfairness, and failure to pay. And while their numbers arent huge, there are enough of them to suggest a pattern of behavior that raises questions about whether pre-politics Trump was much of a friend to small business in practice. Here are a few of their stories:
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The Six Trump Company Bankruptcies
Donald Trump has made huge sums of money in his lifetime, but heâs also lost astronomical amounts. Between 1990 and 1994, for instance, Trumpâs businesses lost more than $804.4 million, even while similar companies saw profits. During that time, and throughout his career, Trump has strategically used bankruptcy to keep himself and his businesses afloat.
Trump-owned businesses have filed for bankruptcy six times so far. Each time, the bankruptcies freed Trump from debt and allowed him to start his next venture. He famously went on to occupy one of the worldâs most powerful positions: President of the United States.
Times Donald Trumps Companies Declared Bankruptcy
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After spending much of the millennium flirting with the idea, Donald Trump actually announced on June 16 that hes going to make a run for the Republican presidential nomination . And while that means the 69-year-old will have plenty of time to air his heady political blend of opinion and charisma, it also means that the flamboyant entrepreneur will fall under more financial scrutiny than ever before.
While hes vowed to turn over his records to the Federal Election Commission on time, one of The Donalds biggest claimsthat hes worth $8.7 billionhas already been called into question. Forbess accounting recently put the figure at $4.1 billion. Sure, that means hes still really richliterally one of the cornerstones of his runbut maybe not as really rich as he wants people to believe.
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Then there are the bankruptcy filings, which have been a leitmotif in public opera that is The Donalds long, storied business and media career. As he is quick to remind everyone, he has never actually declared bankruptcy himself. So lets clear up any confusion there, right away, with some trademark Trump indignation.
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1991, Trumps Taj Mahal in Atlantic City
2009, Trump Entertainment Resorts
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Used Law To Protect Interests
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.
Trump said in August 2015:
“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.
They Will See How Great It Will Become 2009
When Donald Trump has been pressed on his casinos performance during his presidential campaign, he has repeatedly said he left Atlantic City at the right time.
Atlantic City is a disaster, and I did great in Atlantic City, he said during a Republican Party debate last September, according to a transcript. I knew when to get out. My timing was great. And I got a lot of credit for it.
That would suggest Mr. Trump willingly left sometime around 2006, the year that revenues peaked in Atlantic City and that Pennsylvania allowed its first casino to open, a development that marked the start of a rapid downward spiral in the city. The drop-off was exacerbated by the recession that began in 2008.
But in early 2009, as Trump casinos lurched toward bankruptcy for the fourth time, Mr. Trump was still trying to hang on. At loggerheads with board members who had been selected by bondholders after the 2004 bankruptcy, he offered to buy all or a part of the casino company bearing his name. He was rebuffed, and he quit the board soon after.
Testifying in bankruptcy court in Camden, N.J., Mr. Trump argued that the company could not use his name, since shortly before filing the bankruptcy it had stopped paying him the $166,000 a month he received under the services agreement. He testified that his brand was worth $3 billion. He also testified that he was personally negotiating the settlement of a lawsuit in Florida that would yield more than $100 million for the company.
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Used Little Of Own Money
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.”
How The Bankruptcy Laws Helped Donald Trump Stay Rich
We have all heard Donald Trump talk, a lot, during this Republican presidential campaign, and, in the debates, many of his challengers, and the debate moderators, criticized him about his four bankruptcies. Yes, 4 bankruptcies! Take a look at this article, that shows a few things that Donald Trump got right about Bankruptcy.
First question: how can he file for bankruptcy and still be so rich? The answer is that he didnt file personal bankruptcy, he filed corporate bankruptcy. This means that when his business was struggling to pay its creditors, he would reorganize his debts in a Chapter 11 case, to essentially cut deals with his creditors to pay them less money, and still allow his company to function. He remained rich because, even though he lost money as the value of his companies went down, he didnt have his own personal assets on the line. He didnt have to sign any personal guarantees on the loans for the companies. So, while his companies had to go into Bankruptcy Court to restructure his debts, he didnt have to do that. Can you or I do that? Not likely, because for banks, small business owners dont have a track record that allows them to have so many other successful businesses, or the name recognition of Donald Trump, so we have to sign personally on our business loans. And, if the typical small business goes south, most likely, that business owner have to consider personal Chapter 7 or Chapter 13 bankruptcy.
Daniel J. Winter
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Trump Hotel & Casino Resorts 2004
Trump didn’t go back to bankruptcy court again until November 2004, when he filed to shed debt at his various Atlantic City casinos and a riverboat in Indiana. It was another quick trip through bankruptcy court the company shed $500 million in debt and emerged from bankruptcy the following May. Trump turned over majority control of the company to his bondholders but remained the largest single shareholder, and he once again kept control of the casinos.
He Holds His Partner Hostage
Trumps bankruptcies led to the loss of hundreds of millions of dollars by his lenders. Other businesses that are underperforming Theyve written off losses often and given Trump more credit because its better than liquidation.
A former chairman of New Jerseys casino commission, Trump was described as too big for failure Atlantic City: If his casinos had stopped operating, it could have devastated the local economy.
Lenders and gaming officials came up with ways to keep Trump in the game while decreasing his control over these businesses. This was so that he wouldnt be able to take over again.
Numerous Republican senators and members are now linked to Trump through the political equivalent of a bank relationship. In a bid to be the political leader, Trumps fellow Republicans gave their support.
They were also winning when Trump was winning. If Trump loses, many of them will follow him. This could result in Republicans losing Senate elections in Arizona, Colorado and Iowa as well as North Carolina and giving Democrats control of the Senate.
Democrats will also control the executive and legislative branches if Biden wins the White House in a sweeping defeat for Trump and his GOP allies.
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How Trump Leveraged Other Peoples Money To Make Bankruptcy Work For Him: A Timeline
Donald Trump is the self-proclaimed king of debt. Before becoming president, he built his brand and companies with massive amounts of borrowed money.
Allmand Law teamed up with James Publishing to illustrate this timeline by Mother Jones, outlining Trumps Bankruptcies: How Trump Leveraged Other Peoples Money to Make Bankruptcy Work for Him.
In the 1980s, Trump amassed casinos, hotels, an airline, and a 282-foot mega yacht. But his gold-plated bubble popped. By June 1990, Trump was unable to make loan payments on his $3.4 billion in outstanding debts. In total, Trump businesses filed for bankruptcy six times.
In many ways, Trumps path to bankruptcy is just like that of many other business owners. His ambition was bigger than his financial resources. Risky business decisions didnt play out as planned. And his attempts to restructure his debt were unsuccessful. But, in classic Trump form, there are flourishes of scandal.
So how did he rebound and rebuild? Trump, along with his bankruptcy attorneys and financial advisors, used federal bankruptcy laws to their advantage. While investors and creditors lost a lot of their money, Trump was highly compensated for his day-to-day work, earned fees during the property transfers, and slashed his personal debts.
How Donald Trump Bankrupted His Atlantic City Casinos But Still Earned Millions
By Russ Buettner and Charles V. Bagli
ATLANTIC CITY The Trump Plaza Casino and Hotel is now closed, its windows clouded over by sea salt. Only a faint outline of the gold letters spelling out T-R-U-M-P remains visible on the exterior of what was once this citys premier casino.
Not far away, the long-failing Trump Marina Hotel Casino was sold at a major loss five years ago and is now known as the Golden Nugget.
At the nearly deserted eastern end of the boardwalk, the Trump Taj Mahal, now under new ownership, is all that remains of the casino empire Donald J. Trump assembled here more than a quarter-century ago. Years of neglect show: The carpets are frayed and dust-coated chandeliers dangle above the few customers there to play the penny slot machines.
On the presidential campaign trail, Mr. Trump, the presumptive Republican nominee, often boasts of his success in Atlantic City, of how he outwitted the Wall Street firms that financed his casinos and rode the value of his name to riches. A central argument of his candidacy is that he would bring the same business prowess to the Oval Office, doing for America what he did for his companies.
Atlantic City fueled a lot of growth for me, Mr. Trump said in an interview in May, summing up his 25-year history here. The money I took out of there was incredible.
Many others were glad to see him go.
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Time Limits Apply To Discharges Not Bankruptcy Filings
Bankruptcy law doesnt set a minimum period that you must wait before filing for bankruptcy a second time. However, theres a catch. If you file too soon after wiping out debt in a previous case, you wont be eligible for another debt discharge .
Although there are times that it makes sense to file for bankruptcy even though you wont receive a discharge, these situations are rare . Because a bankruptcy filed too soon will end up being a waste of time and money in most cases, its essential to know how to time your bankruptcy filing.
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Fourth Time’s A Charm: How Donald Trump Made Bankruptcy Work For Him
Trump Plaza, Atlantic City. Image via Flickr.
Here at FORBES, we’ve been tracking Donald Trump‘s wealth since the inaugural Forbes 400 rich list in 1982. Today, we value him at $2.7 billion, although he claims he’s worth far more. One question we’re often asked when talk turns to Trump’s fortune: how can a man who has been bankrupt so many times remain a multi-billionaire? How is he worth more now, post-bankruptcies? We spoke to bankruptcy lawyers and casino industry experts — some of whom have had firsthand involvement in Chapter 11 cases connected to Trump — in an attempt to explain how he has survived corporate bankruptcies and thrived in the aftermath.
1. It’s nothing personal…
First things first: Donald Trump has filed for corporate bankruptcy four times, in 1991, 1992, 2004 and 2009. All of these bankruptcies were connected to over-leveraged casino and hotel properties in Atlantic City, all of which are now operated under the banner of Trump Entertainment Resorts. He has never filed for personal bankruptcy — an important distinction when considering his ability to emerge relatively unscathed, at least financially.
“Corporations, limited partnerships, and LLCs in which he had an ownership interest or companies that had his name attached have filed for bankruptcy,” said Michael Viscount of Atlantic City law firm
In Presidential Bid)
2. …it’s just business.
3. It’s better than the alternative.
4. He’s leveraged his persona.
6. He’s not the one to blame.
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Trump Entertainment Resorts 2009
His most recent bankruptcy came in 2009, after the company missed a $53.1 million bond payment. That was pretty much the end of the road for Trump in Atlantic City. While his name remained on three casinos, he resigned from the board and gave up his remaining stake in the company.
“I had the good sense, and I’ve gotten a lot of credit in the financial pages, seven years ago I left Atlantic City before it totally cratered,” he said during the debate.
The two Atlantic City casinos that still had the Trump name filed for bankruptcy yet again in 2014. At the time Trump made sure people knew he was no longer running the company, and sued to have his name removed.
We Are Watching Trumps 7th Bankruptcy Unfold
Donald Trump was a businessman who ran six businesses that went bankrupt because they couldnt pay their bills. Trump, who is running for president again, repeats some of his business mistakes and risks the demise of another venture: his political operation.
Trump, a charismatic real-estate investor and swashbuckler in the 1980s, bet big on Atlantic Citys rise after New Jersey legalized gaming. Trump acquired three casinos that couldnt pay off their debts by 1991. In 1991, the Taj Mahal, Trump Plaza and Trump Castle declared bankruptcy.
Trump transferred his casino assets to a new company, which went bankrupt in 2004 after the lenders restructured the debt. In 2009, the company that emerged from this restructuring declared bankruptcy. Trumps sixth bankruptcy was the Plaza Hotel which he purchased in 1988. It was declared bankrupt in 1992.
Trumps 2016 surprise win mirrors the 30-year-old arrival of Atlantic Citys brash young man. Trumps presidency is now in its fourth year. He gets poor marks from voters for his handling of the coronavirus crisis. The outbreak exacerbated this at Trumps White House.
Democrat Joe Biden is winning in most swing states, and an Election Day blowout could be possible. Trump has suggested he wont leave office if he loses, threatening a constitutional crisis and political legacy.
Trumps bankruptcies are an essential reason for the Trump campaigns current turmoil.
These are five similarities:
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