29th April 2019
Donald J. Trump, current President of the United States of America, once famous business entrepreneur, has ventured and invested into many different businesses over his illustrious career; one such venture was the Taj Mahal Casino in Atlantic City, New Jersey.
What was once hailed as a “fantastic deal” soon took a turn for the worse after the opening of the Taj Mahal on 2 April 1990 (where over 75,000 attended lavish ceremonies), filling for bankruptcy in 1991.
Fast forward to the 2008 recession, the casinos took an even bigger knock that Trump Entertainment Resorts, the casino operating group, was sitting with over $1.7 million in debt; leading to another bankruptcy filing, just days after both Donald and Ivanka resigned from their positions on the board, having cited “internal turmoil” due to the casino’s underwhelming financial situation.
Side note, between 1991 and 2009, bankruptcy and Trump-owned companies has occurred four times.
So how did the Taj Mahal casino end up in bankruptcy, and being sold for 4 cents on the dollar?
In the case of the Taj Mahal, and Trump, this statement didn’t prove quite accurate with a 4 cents on the dollar price tag in the end; having cost over $1.2 billion to build, sold of $50 million.
But during the bankruptcy proceedings, the Trumps’ remained as debt holders in the company, having their say as to how the proceedings would go; Trump and his team opting for going down a route of recognizing the company with its debt still on the books, and the casino would still use the Trump brand. Although, according to government documents in 2011, “no payments were made to Trump in 2010 under the Trademark License Agreement”.
However, with the branding allure on the cards (excuse the pun), the casino went on to spend quite a bit of money on Trump-related merchandise, over a quarter of a million dollars to be precise just on water, in 2009 and 2010.
Trump Entertainment Resorts sued in 2015 to have its name taken off the casinos; arguing that the casinos were in “despair”, and that this was a licensing agreement violation.
End the end, Trump lost the case and the name remained, with the Trump-Taj Mahal ending up in the hands of Carl Icahn after this bankruptcy proceedings; the Trumps also lost their 10 percent stake as a result.
While there are numerous debates as to the running of his most important business venture to date, the US presidency, one thing we can say for sure, there have been some questionable decisions made by Trump of past, and this includes bankrupting a brick and mortar casino, twice.