How Trump Kept Millions with Bankrupt Casinos

Only fragments remain of Donald Trump’s once-proud Atlantic City gambling empire, and most of his former casinos are now bankrupt. So how is Trump still worth $4.5 billion?

The New York Times has uncovered the means that Trump used to keep himself wealthy in light of how poorly his casinos were doing. And one of the key strategies that the New York businessman used to keep his own assets protected involved borrowing money and shifting debt to stockholders.

Here’s one excerpt from the article that explains what Trump did to stay rich:

“His casino companies made four trips to bankruptcy court, each time persuading bondholders to accept less money rather than be wiped out. But the companies repeatedly added more expensive debt and returned to the court for protection from lenders.

“After narrowly escaping financial ruin in the early 1990s by delaying payments on his debts, Mr. Trump avoided a second potential crisis by taking his casinos public and shifting the risk to stockholders.

“And he never was able to draw in enough gamblers to all of the borrowing. During a decade when other casinos here thrived, Mr. Trump’s lagged, posting huge losses year after year. Stock and bondholders lost more than $1.5 billion.”

The Times points out one transaction that Trump made where he pulled $1 million from his failing company, and described “the transaction in securities filings in ways that may have been illegal.”

Despite Trump’s insistence that he got out of Atlantic City at the right time, but others say they were happy to see him leave, including former New Jersey gaming regulator Steven P. Perskie.

“He put a number of local contractors and suppliers out of business when he didn’t pay them,” said Perskie. “So when he left Atlantic City, it wasn’t, ‘Sorry to see you go.’ It was, ‘How fast can you get the hell out of here?’”

H. Steven Norton, a former casino executive at Resorts International, claims that while Trump helped expand Atlantic City, he also hurt many small businesses.

“He helped expand Atlantic City, but he just did not put the equity into the projects he should have to keep them solvent,” Norton said. “When he went bankrupt, he not only cost bondholders money, but he hurt a lot of small businesses that helped him construct the Taj Mahal.”

The Times article gives detailed explanations on a number of sketchy transactions that Trump made during his time in Atlantic City – many of which allowed him to escape personal debt while shifting it to others or draining his casinos’ value.

The only casino Trump owned that still remains today is the Trump Taj Mahal. But he doesn’t have anything to do with running the casino because its parent company, Trump Resorts International, is owned by another group.

And as Trump continues running for the U.S. Presidency, his time in Atlantic City is becoming a forgotten memory.