Use Of Bankruptcy Laws
Trump has never filed for personal bankruptcy, but hotel and casino businesses of his have been declared bankrupt four times between 1991 and 2009 to re-negotiate debt with banks and owners of stock and bonds. Because the businesses used Chapter 11 bankruptcy, they were allowed to operate while negotiations proceeded. Trump was quoted by Newsweek in 2011 saying, “I do play with the bankruptcy laws â they’re very good for me” as a tool for trimming debt. These types of bankruptcies are common in the business world for restructuring to avoid having to close a business. In the case of Trump’s bankruptcies, three were tied directly to gaming industry, which as a whole had suffered during the time the bankruptcies were declared.
According to a report by Forbes in 2011, the four bankruptcies were the result of over-leveraged hotel and casino businesses in Atlantic City: Trump’s Taj Mahal , Trump Plaza Hotel , Trump Hotels and Casino Resorts , and Trump Entertainment Resorts . Trump said “I’ve used the laws of this country to pare debt…. We’ll have the company. We’ll throw it into a chapter. We’ll negotiate with the banks. We’ll make a fantastic deal. You know, it’s like on The Apprentice. It’s not personal. It’s just business.” He indicated that many “great entrepreneurs” do the same.
Verdicts Arent Always The End
Yet another reason why lawsuits can be such a nightmare for everyone involved is that they can stick around. Even when a verdict or a settlement is reached, one party can attempt to appeal the results of the case to a higher court. But even in situations where the results stand and neither side pursues an appeal, information that comes to light in the case can be grounds for another one so long as it doesnt violate an assertion of res judicata.
This is perhaps the most significant and important lesson that can be learned from Donald Trumps long history of lawsuits. During his 2016 term as President, Trump has been under nearly constant legal scrutiny regarding his past and present actions.
Look at how Cohen taking a plea deal during the Stormy Daniels hush agreement controversy led into the attorney general issuing subpoenas to Deutsche Bank and Capital One. Now consider how willing Deutsche Bank is to work in Trumps best interests after he sued them over his unpaid debt just ten years earlier. Even during the run-up to his presidential term, allegations of Trumps civil rights violation in the 70s and harassment of Jill Harth in the 90s were used as points of attack by his political opponents.
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
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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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How Is Donald Trump Able To File For Bankruptcy So Many Times
Prior to the 2016 presidential election, when people discussed then-candidate Donald Trump, they often focused on his personal finances and how he had run his businesses. One of the common refrains had to do with his bankruptcies. According to pundits and critics, Trump had been unsuccessful in business, having to file bankruptcy several times in order to get by. Some people may have seen those stories and read the reports only to wonder how a person can declare bankruptcy so many times. For someone with the wealth of Donald Trump, how is it possible to keep declaring bankruptcy?
Donald Trump and personal bankrtupcyTo understand Donald Trump and bankruptcy, one must first understand the distinction between personal finances and business finances. Businesses are separate entities according to the law. In particular, corporations have their own legal personhood. They are specifically created so that people can avoid personal financial liability if things happen to go wrong. With this in mind, Donald Trump has actually never declared personal bankruptcy. In each instance, his bankruptcy has been a result of a business failure rather than a personal failure.
There have been many other business bankruptcies. Most of those have involved casinos. While Trump has tried hard in the casino business, he has had a number of failures there. On top of that, his Trump Plaza Hotel had to declare bankruptcy in order to seek ample protections.
Business Career Of Donald Trump
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Donald Trump is an American businessman and television personality. He was the 45th president of the United States. He began his real estate career at his father’s company, Elizabeth Trump and Son, which he later renamed the Trump Organization. He rose to public prominence after concluding a number of highly publicized real estate deals in Manhattan, and his company now owns and licenses his name to lodging and golf courses around the world. Trump partly or completely owned several beauty pageants between 1996 and 2015. He has marketed his name to many building projects and commercial products. Trump’s unsuccessful business ventures have included numerous casinos and hotel bankruptcies, the folding of his New Jersey Generals football team, and the now-defunct Trump University.
After being inaugurated as U.S. president in January 2017, Trump resigned all management roles within the Trump Organization, and delegated company management to his sons Donald Jr. and Eric. However, Trump retained his financial stake in the work document, leaving ongoing concerns about possible conflicts of interest.
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United States V Fred C Trump Donald J Trump & Trump Management Inc
During the 70s, the primary business projects of the Trump Organization involved constructing and renovating hotels, skyscrapers, and apartments in New York City. Actions that were allegedly performed at some of these properties resulted in a civil rights case against Trump, his father, and their business, with the United States Justice Department Civil Rights Division as the prosecution.
This particular lawsuit was filed in federal court instead of state or civil court. This is due to the fact that it involved accusations of violating civil rights law, making it a federal issue. In particular, the plaintiff claimed the Trump Organization violated The Fair Housing Act of 1968, which prohibits landlords and real estate companies from housing unavailable to persons based on factors such as their race, religion, disabilities, and similar criteria.
Donald Trumps Business Failures Were Very Real
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Many of Donald Trumps tweets arent worth paying attention to, but on Tuesday morning he posted a pair that demanded inspection. Like many other people, me included, the President had apparently been reading a story in the Times that punctured the mythology surrounding his business career. Based on Internal Revenue Service transcripts of Trumps tax returns from 1985 to 1994, the Timesreport said that Trumps core businesses racked up losses of more than a billion dollars in a ten-year period. During 1990 and 1991, the story said, Trumps losses were so large that they were more than double those of the nearest taxpayers in the I.R.S. information for those years.
Trump could simply have ignored the report or dismissed it as old news. But, with cable-news networks featuring it prominently, and the Daily News, one of Trumps home-town papers, running the front-page headline BIGGEST LOSER, he did what he usually does and counterattacked. This is what he wrote on Twitter:
These are significant sums, certainly. But, as the Times article points out, depreciation charges arent nearly large enough to create the massive losses that Trumps businesses incurred. Some fraction of Donald Trumps losses can be attributed to depreciation, Susanne Craig, one of the authors of the Times piece, wrote in a , responding to Trump. We found most of it was just bad business.
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Personal Bankruptcies 2020 Based On Demographic Profile
9. Well-educated people file 20% of American bankruptcies.
Many misconceptions are flying around when it comes to bankruptcy. But the simple truth is it can happen to anybody.
The American Bankruptcy Institute Statistics clearly show that, while 20% of filers have a college degree, 29% have some form of college education, and 36% are high school graduates. As you might recall, even President Trump has occasionally filed for corporate bankruptcy over the years. While the Trump bankruptcy cases were not individual claims, he has filed a chapter 11 bankruptcy claim as much as six times.
10. Personal bankruptcy rates for males are higher than for females .
According to findings by Dan Mangan at CNBC, men are more likely to file for bankruptcy than women. The gap between the two is very small, but the reasons are very different.
The majority of men who file for bankruptcy do so after losing high-paying jobs. In contrast, 48% of women who file for bankruptcy are forced to do so due to a divorce, as the divorce statistics show.
11. 60% of people who file for bankruptcy earn less than $30,000 a year.
Data on American bankruptcies show that many people filing for bankruptcy are on low household incomes. The figures also show that only 9.2% of people who earn $60,000 per year go bankrupt.
12. According to personal bankruptcy statistics, 64% of people who file for bankruptcy are married.
Trumps Lawsuits: The Greatest Hits
Donald J. Trump, the 45th President of the United States, has been involved in over 4,000 legal battles in some capacity. From his beginnings in the real estate and gambling industries during the 70s and 80s, to his entrepreneurial and entertainment ventures in the 90s and early 2000s, all the way to his baffling transition into politics in the 2010s, Trump has been fighting courthouse battles every step of the way.
Before going any further, heres a quick disclaimer: this piece is meant to be educational and is not a politically motivated attack on the President.Whether or not Trump has committed any wrongdoings or is culpable for any wrongdoings is not the point of this piece. Instead, the goal here is to use his history to understand the reality of lawsuits and how they typically occur in different American industries.
Also, this article wont discuss all 4,000+ lawsuits in which hes been involved thats just not possible! Instead, lets take a look at some of Trumps highest profile cases with the greatest educational value.
Keep reading to take a look at our breakdown of Donald Trumps most significant and infamous cases!
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Trumps Real Estate Lawsuits
Before becoming an entertainment mogul and politician, Donald Trump began his career in 1968 at his fathers New York-based real estate company. He became the companys president 3 years later, naming it The Trump Organization. In his time as president of his business, he supervised many real estate bids, purchases, and projects many of which involved lengthy legal battles at the federal, state, and civil level.
Here are some of the noteworthy cases Trump fought as a real estate mogul:
Construction And Property Law Matters
In 2011, Donald Trump sued Scotland, alleging that it built the Aberdeen Bay Wind Farm after assuring him it would not be built. He had recently built a golf course there and planned to build an adjacent hotel. Trump lost his suit, with the Supreme Court of the United Kingdom unanimously ruling in favor of the Scottish government in 2015.
In 2013, 87-year-old Jacqueline Goldberg unsuccessfully sued Trump on allegations that he cheated her in a condominium sale by bait-and-switch when she was purchasing properties at the Trump International Hotel and Tower.
In 2015, Trump initiated a $100 million lawsuit against Palm Beach County claiming that officials, in a “deliberate and malicious” act, pressured the FAA to direct air traffic to the Palm Beach International Airport over his estate, because he said the airplanes damaged the building and disrupted its ambiance. Trump had previously sued the county twice over airport noise the first lawsuit, in 1995, ended with an agreement between Trump and the county Trump’s second lawsuit, in 2010, was dismissed.
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What Is At Stake For Donald Trump Its Certainly Not Just The Election
The brilliant businessman must repay more than $400m within four years. Next weeks vote could determine whether he can
Going bankrupt once is unfortunate. Going bankrupt twice looks like carelessness. Driving your companies into bankruptcy six times, however, as Donald Trump has done, makes you a brilliant businessman.
That is according to the US president, anyway. Trump, a self-described king of debt, is proud of his multiple business bankruptcies, boasting frequently about how he has brilliantly exploited corporate bankruptcy laws in order to wriggle out of his companies financial obligations. Time and time again, Trump has managed to make others employees, investors and banks pay for his failures. Trump, who has never declared personal bankruptcy, has been able to protect his own assets and move on to the next fiasco.
But is Teflon Dons luck finally running out? With just days to go until the US election, Trump is facing a potentially crippling combination of financial stressors. His business empire has been hit hard by the pandemic according to a recent report by the Washington Post, Trumps golf clubs and hotels are practically empty. They were not doing that well before the pandemic: the New York Times investigation into Trumps taxes last month found his businesses were losing money at a staggering rate.
Arwa Mahdawi is a Guardian columnist