Whether you love him or hate him, Donald Trump has certainly garnered a lot of attention these days. His outspoken approach to campaigning for the presidency has captured the attention of the media all over the place, and he’s getting more than his fair share of attention in the national spotlight.
“The Donald” frequently cites his great success in the world of business and real estate as being the strongest qualifier for his presidential bid. As someone who has estimated his own self-worth at around ten billion dollars, it would be hard to argue that he hasn’t been, at the very least, financially successful.
But as his opponents are quick to point out, Donald Trump–or at least his companies–have filed for bankruptcy on four different occasions. If you are asking yourself, “How can a man who claims to be worth ten billion dollars have filed for bankruptcy—and four times at that?” you aren’t alone. Many have wondered the same thing as they, unfortunately, associate bankruptcy with complete financial ruin. That notion, however, is a complete misconception, and Donald Trump’s story proves it.
To make a long story short, Trump-branded companies have filed for bankruptcy in 1991, 1992, 2004, 2009. Donald Trump himself points to a large variety of circumstances—some that were out of his control–as the reason for these filings. In the 1991 case, for example, his brand-new Taj Mahal Casino in Atlantic City was buried under a mountain of debt following its one-billion-dollar price tag that was paid with high-interest bonds. The massive cost of building the casino wasn’t un-calculated, though. Trump figured his investment was a good one because of the massive popularity of the gambling and night-life scene in Atlantic City at the time.
But the investment didn’t pan out the way Trump intended. A slumping economy left Americans with little disposable income, and places like Atlantic City saw a huge decline in visitor traffic. Because of the high-interest bonds used to build the Taj Mahal, Trump soon found his one billion dollar project to now be a 3.4 billion dollar liability.
Though he had taken steps to legally separate his own fortune from the business entity associated with the Taj Mahal, Trump’s court proceedings regarding his debt still took quite a big toll on him personally, and he lost quite a bit of his own fortune as a result. As part of the settlement, his creditors were even allowed some control over his personal spending habits, and that was certainly a blow to his ego. He even had to sell his prized yacht and an airplane to satisfy some of the demands of his settlement.
The Taj Mahal story is just one example, and the specifics of his other three filings are well documented and can be easily found by anyone who is interested.
When asked about his bankruptcies in 2011 by ABC News’ George Stephanopoulos, Trump simply said, “I’ve used the laws of this country to pare debt…” Though Trump’s statement may seem insignificant, there is a lot of truth in what he said. Bankruptcy laws are just that—laws—and they are to be used to protect the financial well-being of the people of this country.
To be sure, the circumstances surrounding Donald Trump’s filings were unique to his situation, and the type of protection he sought was specific to the businesses he ran. But the lesson we can learn from his situation is an important one. Bankruptcy laws are in place for a reason, and when used properly and competently, they can be a very important tool in protecting the future of Americans in all walks of life.
Though the financial troubles of most of us don’t even compare (dollar-wise) to the problems multi-billionaires may face, they can feel just as big in our own lives and take on just as large a toll on us and our families. The good news is that there is hope are there are laws in place to protect us. The attorneys at Burr Law Office are skilled Milwaukee lawyers who know the law and know how to help. Take advantage of your rights under the law by seeking counsel from us.