Trump Taj Mahal Chapter 11 bankruptcy

The Trump Taj Mahal opened in Atlantic City in April 1990 as the largest casino in the United States, financed with approximately $675 million in junk bonds carrying interest of roughly 14%. The capital structure required casino revenues that the property never produced. By the spring of 1991, the Taj Mahal was unable to service its debt, and on July 16, 1991, Trump Taj Mahal Associates filed a voluntary petition for Chapter 11 protection in the United States Bankruptcy Court for the District of New Jersey, case number 91-13321, after defaulting on a $47.3 million bond interest payment.

Under the negotiated plan of reorganization, Donald Trump ceded approximately 50% of his equity in the casino to bondholders in exchange for a reduction in interest rates and an extension of maturities. He retained the Trump name on the property and a management role. The reorganization was completed in October 1991. Contemporaneous reporting by the New York Times and the Associated Press, and a later reconstruction by Russ Buettner and others for the Times in 2016, documented that Trump personally extracted millions of dollars in salary, bonuses, and perquisites from the Taj Mahal and related Atlantic City entities even as bondholders, contractors, and small vendors absorbed losses.

The Taj Mahal filing was followed within eight months by Chapter 11 petitions for Trump Castle Associates and Trump Plaza Associates, both filed March 9, 1992. Together with the November 1992 Plaza Hotel restructuring, the 2004 filing of Trump Hotels and Casino Resorts, and the 2009 and 2014 filings of Trump Entertainment Resorts, the Taj Mahal case marked the beginning of a record of corporate insolvencies that no other major real estate developer of comparable scale matched in the same period. The Taj Mahal itself closed permanently on October 10, 2016, and the 34-story tower was imploded on February 17, 2021.