The Trump Files: How Donald Made a Fortune by Dumping His Debt on Other People

Ivylise Simones

For indispensable reporting on the coronavirus crisis and more, subscribe to Mother Jones' newsletters.


Until the election, we’re bringing you “The Trump Files,” a daily dose of telling episodes, strange but true stories, or curious scenes from the life of GOP nominee Donald Trump.

In 1995, five years after his business empire nearly collapsed under massive debt, Donald Trump was finally righting the ship. He’d sold off costly assets like his mega-yacht and money-losing airline, gone through two bankruptcies, and gotten debt relief by giving his creditors partial ownership of some of his properties. But the three casinos he still controlled—the Taj Mahal, the Trump Plaza, and the Trump Castle—were still deeply in debt.

So Trump figured out a way to erase that debt—at least for himself. He created Trump Hotels and Casino Resorts, a publicly traded company that operated the Trump Plaza. For about six months, it was a success. The company’s stock shot up from $14 to $35 a share, putting Trump back on the Forbes list of America’s 400 wealthiest people and helping him pay down $88 million of his personal debt, according to the Washington Post’s Michael Kranish and Marc Fisher in their book, Trump Revealed. “The IPO of Trump Hotels was what finally fueled Trump’s comeback,” wrote Fortune this March.

Then Trump sprung the trap. He used the company to buy the Taj Mahal and the Trump Castle, effectively purchasing the casinos from himself at a price that he set. “The company bought his Castle for $100 million more than analysts said it was worth,” the Post reported in June. “Trump pocketed $880,000 in cash after arranging the deal.” The two properties were also $1.7 billion in debt, and that debt suddenly belonged to Trump Hotels instead of Trump himself.

By the end of 1996, Trump Hotels stock was worth just $12. It eventually crashed down to 17 cents a share. “A shareholder who bought $100 of DJT [the company’s ticker symbol] shares in 1995 could sell them for about $4 in 2005,” Kranish and Fisher wrote. The company lost more than a billion dollars and filed for bankruptcy in 2004 and 2009. But even as its value collapsed over the years, the company paid Trump a total of $82 million by Fortune‘s estimate, covered the cost of entertaining his VIP guests, signed contracts to buy other Trump products, and even employed then-26-year-old Ivanka Trump on its board.

Donald and Ivanka resigned from the company’s leadership in 2009 in protest of the bondholders’ demands to go into Chapter 11 bankruptcy again. But despite making a killing while leaving his shareholders in the lurch, he doesn’t have any regrets. “All I can say is I wasn’t representing the country,” he told the Post. “I wasn’t representing the banks. I wasn’t representing anybody but myself.”

Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

We have a new comment system! We are now using Coral, from Vox Media, for comments on all new articles. We'd love your feedback.