Donald Trump - Gambling Successes and Failures
Donald John Trump was born in Queens, New York. The father of the future president, Fred, owned a large construction company. Donald was educated at the New York Military Academy and the Wharton School of Finance and Commerce at the University of Pennsylvania. In 1971, he took over the real estate company, renaming it the Trump Organization, continuing his father's legacy. Soon the business became involved in various projects: hotels, resorts, residential and commercial buildings, casinos and golf courses.
- Opening a gambling business
- Debt Problems
- Debt and Bankruptcy Troubleshooting
- Plaza Trouble
- Gambling Shutting Down
|Name 714||Дональд Трамп|
|Born||June 14, 1946|
|Birthplace||Queens, New York|
|Education||Wharton School of the University of Pennsylvania|
Opening gambling business
In the mid-1980s, Trump was at the top of the gambling business in Atlantic City. Before gambling was legalized in this city in 1978, Las Vegas was the only place where casinos were allowed, but it was 3,200 kilometers from the East Coast. At one point there were fifteen establishments in New Jersey, and the Trump Organization owned three of them.back to index ↑
Other states have also startedlegalizing gambling in their territories. Because of this, the number of casinos in Atlantic City began to decline. Trump has struggled unsuccessfully with competitors opening elsewhere on New Jersey's Atlantic coast. As a result, Trump's business empire began to fall apart. He tried to dominate the industry by owning three casinos.
Much of the debt was accumulated by financing the Trump Taj Mahal, one of the buildings the Trump Organization acquired in 1987. $79 million was spent on its purchase.
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Mark Hoffberg, a Wall Street Journal financial analyst, wrote that Donald was heavily indebted because of the real estate he had purchased. He could not overpower the payments, as the money was borrowed at high interest rates due to high risks. The situation worsened in the fall of 1988. The Taj Mahal Casino opened to the public in the summer, but as winter approached, the crowds began to thin out. As a result, the income no longer covered the interest on the debt.
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After financial difficulties, Trump began to find fault with contractors and refused to pay for supposedly "poor quality work."
Решение проблем с долгами и банкротством
The businessman's answer was classic for him. First, he got Hoffberg fired from the Wall Street Journal when the financier's analysis came true. Second, he blamed three business associates whom he had previously praised for months for hard and diligent work. Thirdly, they died in a helicopter crash while working for the company. He announced that they were responsible for the collapse of the Trump Taj Mahal.
In 1990, Trump nearly declared himself bankrupt due to huge personal and business debts. At one point, creditors assigned him a monthly allowance of $450,000. His father bailed him out by borrowing hundreds of millions of dollars.
He realized that he had become too powerful to fail. Creditors did not want to take his property and manage it. In 1990, with almost $1 billion in personal debt, the businessman reached an agreement with bankers to avoid bankruptcy.
Problems with the Plaza
Прибыль Plaza резко упала в 1990 году из-за собственного отеля. Компания открыла Тадж-Махал. Здания располагались в 1,6 километрах друг от друга и являлись конкурентами. Развлекательный центр чудом предотвратил дефолт по платежу владельцам акций в 1991 году. Трамп взял ипотечным кредитом на $25 000 000 на строительство гаража. Бизнесмен договорился о реструктуризации долгов с инвесторами Plaza. Он выплатил им $300 000 000 облигациями (на $200 000 000 с заниженными процентными ставками, а также на $100 000 000 привилегированными акциями).
The Plaza expansion required $42 million to build. Work started in 1993. It was planned to demolish the unfinished Penthouse casino, add 2,787 square meters of gaming space and playgrounds, reconstruct the former Holiday Inn building, and build the East Tower, which will include 361 hotel rooms. The work proceeded against the backdrop of a high-profile litigation. The company tried to sue the estate of Vera Cocking, a retiree whose building was located near the Penthouse. The woman, whose interests were defended by the Institute of Justice, won, thwarting plans to build a car park.
In 1995, a businessman gave away his stake in the Plaza to his own new company. The firm also bought the Regency hotel complex.
The two-stage opening of the East Tower began in the fall of 1995 and ended in the winter of 1996. In 2011, the company announced that it would either decide to sell the casino or refurbish and expand it with business partners.
In the winter of 2013, the group decided to get rid of the building. The deal was planned to be carried out with the Meruelo Group from California, which owns the Grand Sierra Resort hotels in Tahoe. The owner wanted to make a major investment in real estate, subsequently renaming the properties. The deal fell through due to the fault of Carl Icahn, Plaza's senior creditor, who denied the sale at the advertised price.back to index ↑
The closure of the gambling business
In 2004, when the company again found itself on the verge of bankruptcy, The The New York Times published words that would become prophetic during the campaign years later: “His name has become so synonymous with success that even the most humiliating These failures had almost no effect on the reputation. Taking advantage of it, he then sold the shares of a public company that bought the distressed property from him.”
Name and fate of the establishments:
- Harrah’s in the Plaza — closed 09/16/2014. Demolished 02/17/2021.
- Spotlight 29 in Coachella, CA - Closed and sold in 2016.
- Majestic Star II in Gary, Indiana - Closed in 2021.
- World's Fair at Plaza - closed 1999, demolished 2000.
- Golden Nugget, New Jersey - sold to Landry's, Inc. in 2011.
- Club Privee, Canouan, St. Vincent - sold, operating.
- Trump Taj Mahal (renamed Hard Rock Hotel & Casino) - sold in 2016, again opened in 2018.
On February 13, 2009, Donald announced his resignation as chairman of Trump Entertainment Resorts. A few days later, Trump filed for bankruptcy protection. He avoided debt by letting the company go under. The future president said: "I like to win." Trump has become a master at stealing money with a pen and blaming others for his difficulties.