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Queens Chronicle

35th Anniversary Edition: News Makers (1991) Trump runs out of cash, the first time

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Posted: Wednesday, November 13, 2013 10:30 am | Updated: 2:37 pm, Thu Nov 14, 2013.

Before there was Donald Trump the reality TV star, or Donald Trump the Republican presidential hopeful, or Donald Trump the skeptic of President Obama’s birthplace, there was Donald Trump the entrepreneur.

Trump was the epitome of the wildly successful, superrich business magnate in the go-go ’80s. Hotels, casinos, an airline, the gleaming new Trump Tower in Manhattan — he owned it all. His 1987 book, “The Art of the Deal,” sold millions of copies and topped the New York Times’ nonfiction best seller list for weeks on end. It seemed everything The Donald touched turned to gold.

“I like thinking big,” he says in the book. “I always have. To me it’s very simple: If you’re going to be thinking anyway, you might as well think big.”

When the city wasn’t anywhere near finishing its planned two-and-a-half-year renovation of the Wollman Skating Rink in Central Park after six years of work, Trump convinced Mayor Ed Koch to let him finish the project. He did it in six months, spending only $750,000 of the $3 million budgeted to complete the job.

Everything in the ’80s seemed to indicate that Trump, who grew up in Jamaica Estates, was as successful as could be, worth at least $1 billion. He had grown up wealthy, but took his father’s real estate development company to new heights and shifted his focus from middle-income housing in the outer boroughs to Manhattan skyscrapers and Atlantic City casinos.

But beneath the gleaming surface, things were not so golden. Trump was massively in debt. By 1989, he was unable to pay back his lenders, and his use of junk bonds to finance his Taj Mahal casino, along with a weakening economy, caused the business to file for Chapter 11 bankruptcy protection in 1991. Trump nearly went personally bankrupt that year too.

But his creditors, worried they would lose even more money if they fought him in court than if they reached an agreement, restructured his debts. The U.S. Bankruptcy Court agreed to give half of the casino’s ownership to the bondholders in exchange for their accepting lower payments from Trump, and he made it through the crisis. But it wasn’t the only one.

Various Trump businesses also sought bankruptcy protection in 1992, 2004 and 2009. Yet he says it’s all part of doing business.

“I’ve used the laws of this country to pare debt,” he told ABC News in 2011. “We’ll have a company, we’ll throw it into a chapter. We’ll negotiate with the banks. We’ll make a fantastic deal. You know, it’s like on ‘The Apprentice.’ It’s not personal, it’s just business.”

Trump has bounced back from each bankruptcy case and has never led anything but the life of a superrich man. At the Comedy Central roast of himself two years ago, he joked, “What’s the difference between a wet raccoon and Donald J. Trump’s hair? A wet raccoon doesn’t have seven billion f---ing dollars in the bank.”

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