Donald Trump And The Bailout Program
Donald Trump is a man of many parts. He is a business magnate, socialite, celebrity television personality and author. Trump however is best know as a real-estate developer and founder of Trump Entertainment Resorts, which own and run hotels and casinos across the world. |
Trump has a flamboyant lifestyle and colorful personality with a penchant for maintaining a high profile in the public eye. His three marriages and amorous affairs have been fodder for much sensational publicity.
Till about 1989 Trump focused on real estate ventures with remarkable success, concentrating his activities in Manhattan. In the process he over-extended himself and the effects of recession in the late 80s left him unable to meet loan repayments. To keep his businesses alive, he went in for more loans and postponed interest payments. He completed construction of the Taj Mahal, his third casino, with funding from high-interest junk bonds. By 1991, Trump was verging on business and personal bankruptcy.
Hundreds of millions of dollars had to be written off by his creditors, the banks and bond holders. Nonetheless they opted to restructure his debt with a bailout program, to avert the risk of losing more in the courts. Some examples are as follows:
Trump ceded 50 percent ownership of the Taj Mahal Casino in exchange for a revision in repayments of the outstanding loan at a lower rate of interest.
Trump surrendered 49 percent stake to Citibank and five other creditors, of the luxury Trump Plaza Hotel. In return, the balance due would be rescheduled and he would retain his nominal position as chief executive without pay and executive powers.
Trump ingeniously hammered out similar deals on several other ongoing projects but managed to stay afloat. In the process his net worth was significantly reduced. But Trump is indefatigable, and has since managed to bounce back undeterred.
More Articles :
|
