"People that don't understand finance might not understand," billionaire Donald Trump said in announcing his decision to file bankruptcy at his New Jersey casino. But "for intelligent people," he added, the restructuring "enhances the (Trump) brand."
"I don't think of it as a failure," he continued, "It's a success. In this case, it was just something that worked better than alternatives. It's just a technical thing."
This is not the first time Trump casinos have declared bankruptcy. In 1992, he restructured (avoided) more than $1 billion in debt (money owed to other people). Now he seeks bankruptcy protection again, for more than $1.8 billion in debts. Trump casinos lost $48.8 million in the first quarter of this year alone. Investors who bought shares in 1995 at the public offering have lost 87 percent of their money.
Yet, despite others' loses, Trump negotiated a $2 million-a-year salary for himself.
At what point does the American public stop being the ignorant patsy, accepting the tirades and dishonorable behavior of the rich and famous? Overpaid athletes, like those involved in the NBA brawl last weekend, show that money doesn't buy class, and business tycoons show no shame in leaving investors penniless. One has to wonder whether Trump's investors consider the bankruptcy "a success"?
Trump's ego may be intact, but the tide may be turning on the public's acceptance of such actions. Hope comes in the comments on the Trump bankruptcy by Jeffrey Sonnenfeld, associate dean of the Yale School of Management.
"His name is not a good name; it is a bankrupt name," Sonnenfeld said. "Nothing is lower in the capitalist system than bankruptcy, other than fraud."
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