The 1990s were embarrassing years of bankruptcy and beggaring to banks for the Exaggerator-in-Chief, due to his egregious errors in judgement during the 1980s. Donald Trump’s business decisions nearly bankrupted the second generation wealthy man-child living high above Manhattan long before he became a “populist” and goose-stepped the Republican Party off of a cliff.
The Republican nominee’s manic decision making in the 1980s was mostly to blame, and the blonde blowhard did what any self-made man in his shoes would do: he begged his siblings for a $30 million dollar loan. The Times reports:
By 1993, Mr. Trump was still in dire straits. He dispatched a company executive to ask his siblings if he could borrow $10 million from their respective shares of the family trust. Mr. Trump received the loan, according to people who were involved and spoke on the condition of anonymity to avoid angering him, and went back for another $20 million the following year. Mr. Trump has denied borrowing from his siblings. By the end of 1991, the amount of cash that Mr. Trump had personally available to him had fallen below $1.7 million and was expected to fall below $800,000 within months — a small cushion given his monthly expenditures.
Mr. Trump had negotiated reduced interest rates on some of his loans, partially by agreeing to give up money-losing enterprises, including his airline, his yacht and a stake in the Plaza Hotel in Manhattan. His lenders forced him to live for a time on $450,000 a month.
Yep, that is how Donald Trump lost his stake in the national landmark hotel purchased for a premium in a real estate deal he described at the time, “I can never justify the price, no matter how successful the Plaza becomes.” It would be hard to imagine anyone calling this one of the “best deals” anyone would make, and just a few short years later Trump was dispossessed of his shares in the building by his creditors to payoff his even more ruinous deals in Atlantic City. Trump’s sale of the Plaza Hotel in New York was a “prepackaged bankruptcy.”
This weekend, Donald Trump’s 1995 tax returns were released in a bombshell report by the New York Times, revealing that the purportedly successful businessman actually lost almost a billion dollars in 1995 during the midst of the Clinton economic boom. Adjusted for inflation, Trump’s loss would be the equivalent of losing $1,445,690,000 today – which for perspective is about the same sized loss made by Samsung in shipping the Note 7 cell phone, whose battery explodes, and is now banned from air-flights.
But Trump wasn’t about to give up, so he concocted his worst scam yet – taking his real estate holdings in Atlantic City public as a means of shifting his personal debts onto shareholders and raking in big fees for causing multiple bankruptcies. In 1995, “he took his struggling casinos public, selling stock to raise money and shifting his personal debt into the new company,” according to the New York Times:
Then, in June 1995, with the risk of being forced into bankruptcy just weeks away, Mr. Trump shifted ownership of the Plaza casino to a new, publicly traded company: Trump Hotels and Casino Resorts. In the initial public offering, 10 million shares were sold at $14. At the same time, the company also sold another $155 million in junk bonds, at a 15.5 percent interest rate.
A week after the initial public offering, the new company began using some of the almost $300 million it had raised to clear Mr. Trump’s personal debts. During his financial pinch two years earlier, Chemical Bank had forced Mr. Trump to give up his ownership of the Trump Regency, a hotel next to the Trump Plaza. He held an option to buy it back for $60 million, which included debt on the hotel and $35.9 million that he personally owed the bank from his purchase of a Manhattan property. The new company exercised that option, in effect transferring Mr. Trump’s debt to its own balance sheet. In 1996, the public company issued more stock and sold $1.1 billion in junk bonds. The money was used in part to pay off $330 million in bonds on the Plaza that had been guaranteed by a company Mr. Trump controlled, as well as almost $30 million that Mr. Trump personally owed to two banks. The company also bought the Trump Taj Mahal and Trump Castle — soon renamed the Trump Marina — shifting more of Mr. Trump’s debt to shareholders.
“The company continued to lose money and underperform its competitors, but Mr. Trump was paid roughly $45 million though 2009.”
Republican nominee Donald Trump talks about a rigged system, but that is the only kind of system which could produce a disastrous businessman like Donald Trump. He failed upward, and never looked back. Even Trump’s CEO at the time (“the best people”) was a kleptomaniac who eventually had to quit after being arrested on multiple felonies!
All told, Republican nominee Donald Trump abused the system, his creditors, shareholders, workers, lenders, bondholders and business partners throughout the 1990s until he stood on their backs as the beneficiary of tremendous write-offs, prepackaged bankruptcies and eye-popping losses.
The Trump casinos weren’t so fortunate and declared three more bankruptcies until ousting the manic late-night tweeting realty TV show host from the operations in 2009. Shareholders paid Donald Trump $3.25 million dollars a year for 14 years for the privilege of his guiding them into those bankruptcies.
The Trump Taj Mahal mercifully closed its doors earlier this year – just after Labor Day, when striking workers got fed up with low wages and stripped away benefits lost in the casino’s last trip to bankruptcy court.
Unconscionable losses? Doors closed? Prepackaged bankruptcy? Donald Trump calls all of that “success.”
Grant Stern is an Editor-At-Large for OccupyDemocrats and published author. His new Meet the Candidates 2020 book series is distributed by Simon and Schuster. He's also mortgage broker, community activist and radio personality in Miami, Florida., as well as the producer of the Dworkin Report podcast. Grant is also an occasional contributor to Raw Story, Alternet, and the DC Report, and a senior advisor to the Democratic Coalition