The Taj Mahal Bankruptcy Issue

In 1989, during the recession, Donald Trump was finding it harder and harder to pay off business loans. Financing the Taj Mahal, his third Casino mostly on junk bonds, Trump found himself in quite a fix. The Taj Mahal was $1 Billion project. After several attempts to delay loan payments and taking out additional loans, in 1991, Trump was finally forced into business bankruptcy.

So what was the result of this terrible financial debacle? Trump, along with the advice of his legal council, came to an agreement with the Banks and Bond Holders, who had already lost millions of dollars but were trying to stave off their losses, to reconstruct his debt. In order to do this, however, he had to get a court approved petition insuring that the Casino would meet competitive projections for earnings and profits. Otherwise, he would lose control of the Board.

On October 5, 1991, Trump gave 50% of the ownership to those Bond Holders and Banks that he was in agreement with, in order to establish lower interest rates and extend the time of payoff.

Although, he is now out of Bankruptcy, it was a trialing time for Trump  but inspite of it all, he still manages to hold onto half of the building which is one of the most recognized Casinos in Alantic City.