major catalyst for the Trump debt cycle. There is some truth
in this, particularly after Trump unsuccessfully tried to finance
the construction of its sister casinos in 1989 through mostly
junk bonds.
RESULTS OF THE BAILOUT PACKAGE
The bailout package allowed him to take out second and
third mortgages on most of his properties. Leverage became
a common theme for Trump, who notoriously dealt with
bankruptcy four times. Trump used the extra rope from his
lenders to shore up debt, build up his rents and purchase other
enterprises, including more casinos.
The early 1990s were tumultuous for the Trump Organization
and Donald's business prospects. In 1991 and 1992, two of
Trump’s Atlantic City casinos (the Trump Taj Mahal and the
Trump Plaza Hotel) filed for Chapter 11 bankruptcy, which
allowed them to restructure their debt. As a result of the onerous
debt, in 1991, Trump was forced to cede 50% of ownership in
the Taj Mahal to his bondholders in exchange for lower interest
payments and extra deferments. Shortly after, Trump combined
his three Atlantic City casinos, forming a single company, called
Trump Entertainment Resorts.
The TRUMP RALLY Publication 105