This guy has NEVER been wounded in combat, so that makes him a far better choice as a military leader:
Posted on 02/12/2016 9:07:05 AM PST by AndyJackson
In an effort to take out frontrunner Donald Trump, Republican presidential candidates have pelted Trump with criticism over his multiple trips to federal bankruptcy court. That criticism was on full display in CNN's Republican debate Sept. 16. Most notably, former Hewlett-Packard CEO Carly Fiorina criticized Trump's history of bankruptcies in his businesses.
"You know, there are a lot of us Americans who believe that we are going to have trouble someday paying back the interest on our debt because politicians have run up mountains of debt using other people's money," Fiorina said. "That is in fact precisely the way you ran your casinos. You ran up mountains of debt, as well as losses, using other people's money, and you were forced to file for bankruptcy not once, not twice, four times."
Trump doesn't deny that four of his businesses have filed for bankruptcy. He argues, however, that filing for bankruptcy is a common business decision, and he was smart to make the moves when he did.
"Hundreds of companies" have filed for bankruptcy, Trump said earlier in the debate. "I used the law four times and made a tremendous thing. I'm in business. I did a very good job."
Trump's four bankruptcies were Chapter 11 reorganizations (named for its location in federal bankruptcy code), which are designed to restructure businesses without shutting them down completely. The purpose is to "save" the business, as opposed to other forms of bankruptcy which would liquidate the company, said Michael Venditto, a partner at the ReedSmith law firm who has extensive experience with Chapter 11.
Because they keep coming up, we decided to outline Trump's four bankruptcies. We also talked to some finance experts, who told us Trump is correct that Chapter 11 reorganization is not always the result of bad business decisions.
Bankruptcy 1: The Trump Taj Mahal, 1991
The first bankruptcy associated with Trump was perhaps the most significant in terms of his personal finances, according to news reports at the time. He funded the construction of the $1 billion Trump Taj Mahal casino in Atlantic City, which opened in 1990. By 1991, the casino was nearly $3 billion in debt, while Trump had racked up nearly $900 million in personal liabilities, so the business decided to file for Chapter 11 reorganization, according to the New York Times. As a result, Trump gave up half his personal stake in the casino and sold his yacht and airline, according to the Washington Post.
Bankruptcy 2: Trump Plaza Hotel, 1992
Trump acquired the Plaza Hotel in New York for $390 million in 1988. By 1992, the hotel had accumulated $550 million in debt. As a result of the bankruptcy, in exchange for easier terms on which to pay off the debts, Trump relinquished a 49 percent stake in the Plaza to a total of six lenders, according to ABC News. Trump remained the hotel's CEO, but it was merely a gesture -- he didn't earn a salary and had no say in the hotel's day-to-day operations, according to the New York Times.
Bankruptcy 3: Trump Hotels and Casinos Resorts, 2004
Trump Hotels and Casinos Resorts filed for bankruptcy again in 2004 when his casinos -- including the Trump Taj Mahal, Trump Marina and Trump Plaza casinos in Atlantic City and a riverboat casino in Indiana -- had accrued an estimated $1.8 billion in debt, according to the Associated Press. Trump agreed to reduce his share in the company from 47 to 27 percent in a restructuring plan, but he was still the company's largest single shareholder and remained in charge of its operations. Trump told the Associated Press at the time that the company represented less than 1 percent of his net worth.
Bankruptcy 4: Trump Entertainment Resorts, 2009
Trump Entertainment Resorts -- formerly Trump Hotels and Casinos Resorts -- was hit hard by the 2008 economic recession and missed a $53.1 million bond interest payment in December 2008, according to ABC News. After debating with the company's board of directors, Trump resigned as the company's chairman and had his corporate stake in the company reduced to 10 percent. The company continued to use Trump's name in licensing.
So four Trump companies filed for Chapter 11 reorganization. Is that as big a deal as Fiorina says?
Risky business
While it would be better to avoid a situation where Chapter 11 reorganization is necessary, filing for bankruptcy can be a "sound business decision" when the company is facing serious financial problems, Venditto said. It's better than the business shutting down completely.
"However, the source of the financial problems varies from case to case," he said. "Sometimes it is the result of circumstances beyond the control of the business. Sometime it caused by poor judgment. More frequently, it is a combination."
Trump's four bankruptcies all happened within the past 25 years. That's a lot, said Stephen Lubben, a leading expert in corporate finance and professor at Seton Hall School of Law. But to be fair, the gaming industry has been struggling the past few years, he added, and three out of four of Trump's bankruptcies were tied to casinos.
It's not fair to put all the blame on Trump for the four bankruptcies because he's acting as any investor would. Investors often own many non-integrated companies, which they fund by taking on debt, and some of them inevitably file for bankruptcy, said Adam Levitin, a law professor at Georgetown University.
He added that people typically wouldn't personally blame former Republican presidential candidate Mitt Romney or investor Warren Buffett for individual failures within their investment companies, Bain Capital and Berkshire Hathaway, respectively.
"The only difference is that Trump puts his name on his companies, which means people associate them with him, but he's not at all the leader in the bankruptcy space," Levitan said. "These bankruptcies were not defining moments for Trump and shouldn't color our view of him."
Our ruling
Fiorina said Trump was "forced to file for bankruptcy not once, not twice, four times."
While it is accurate that Trump filed Chapter 11 bankruptcy four times, Fiorina's statement doesn't tell the whole story. In context, Fiorina's phrasing suggests Trump was personally responsible for the failures of these businesses, but in reality, much was out of Trump's control -- such as a struggling casino industry. But Trump is certainly not blameless.
In the world of real estate, Trump investment style has the the largest potential rewards however the biggest risk.
There are still companies out there damaged by the 08-09 crash.
prove it
Pretty soon they'll be blaming him for the sinking of the Titanic.
He also had a lot of other peoples money.
“A group of at least 20 disgruntled former Trump Tower Tampa buyers plans to sue Donald Trump, accusing the New York tycoon of falsifying his role in the $300-million project that went bankrupt last year. “
Do you have an understanding of the difference between Chapter 11 and Chapter 7?
It sounds like you don’t.
Or, have the government bail them out which is what really happened.
The bank never got penalized for making poor loan decisions, we the taxpayers did.
During the run up to the crash, Terry Schiavo could have gotten a million dollar loan without any documentation of income or employment.
This is why corporations exist, to shield individuals from the financial ups and downs inherent in business. Bankruptcy laws have been around for hundreds of years and were specifically authorized by the US Congress, under Title 11 USC.
A banker I once knew had a cartoon on his wall that showed a hayseed-chewing farmer sitting before his banker’s desk. The farmer is saying “Yup, I may be a dumb SOB..” and in the next block, “But I ain’t the dumb SOB who loaned me all that money!”.
Point being, every banker who got “stiffed” loaned money in the expectation of making a profit in terms of the interest he would earn. That is capitalism. For those who don’t like it, they have a choice: Bernie Sanders or Hillary.
One of the best known venture capitalists in the world is John Doerr of the firm Kleiner Perkins Caufield & Byers. About 90% of their deals end in liquidation. The 10% that pay off make people gazillionaires, and he is one of the richest men in the world.
corporate vs personal
11 reorganization vs 7 liquidation
this smear stuff is like saying shareholders of a bankrupt company filed for bankruptcy.
No worries Andy. MNJohnie is a known Trunp hater and is very vocal about it Let him rant.
Works for him Sucks if you are one of the 90%. But its ok to screw people if it makes you rich.
Cripes. If Cruz should win the nomination, I hope he has a better understanding of the business world than some of his supporters.
Babe Ruth: 1330 Strike Outs - 714 Home Runs (it happens to the best of them!)
Didn’t Romney’s group buy corporation and liquidate companies within it? Maybe I remember that incorrectly.
The politico article isn’t bad. But it misses the big picture. Trump uses bankruptcy as a negotiating tactic with the banks.
http://www.libertarianrepublican.net/2016/02/donald-trumps-big-atlantic-city.html
http://www.libertarianrepublican.net/2016/02/trump-chicago.html
This guy has NEVER been wounded in combat, so that makes him a far better choice as a military leader:
I wouldn’t play with answers unless you know the field of business. Only a fool would.
No kidding!
Trump thought TARP was great. Not a conservative position if you ask me.
Yes, AND TRUMP put his name on these businesses. Unlike the rest who hide behind the name of the business and later claim that they had NOTHING to do with that business failure..anyone come to mind? Like the gold digger Carly?
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