Trump Hotels & Casino Resorts Files Bankruptcy, Trump Removed as CEO

Trump Hotels and Casino Resorts, the publicly traded company that operated Trump’s Atlantic City casino empire, filed for Chapter 11 bankruptcy protection on November 21, 2004, unable to make a $73 million interest payment due November 1. The company was drowning in approximately $1.8 billion of debt accumulated from years of overleveraged casino operations and unsuccessful expansion attempts. The bankruptcy forced Trump to relinquish his CEO title and drastically reduce his ownership stake from 47 percent to 27 percent, though he remained the largest individual shareholder and maintained his role as chairman.

Years of Mounting Debt

Trump Hotels and Casino Resorts had been publicly traded since 1995, when Trump took the company public to raise capital for his struggling Atlantic City casinos. Despite multiple restructurings in the 1990s, the company never achieved sustainable profitability. By 2004, the company owned four casinos—Trump Taj Mahal, Trump Plaza, Trump Marina, and Trump Casino in Indiana—but the properties collectively generated insufficient revenue to service the massive debt load. The Atlantic City gaming market had become increasingly competitive, with newer casinos drawing customers away from Trump’s aging properties. Trump’s management extracted high fees and consulting payments even as the company struggled, enriching himself while shareholder value collapsed.

Creditors Force Trump Out as CEO

The bankruptcy restructuring required Trump to give up his CEO position, marking a significant loss of operational control. Bondholders, who were facing massive losses on their investments, insisted that Trump step aside from day-to-day management while retaining him as chairman primarily for his brand value. Trump’s ownership stake was cut nearly in half, dropping from 47 percent to 27 percent, as bondholders converted debt into equity. The bankruptcy plan left Trump with a continued public association with the casinos—valuable for his personal brand—while creditors absorbed hundreds of millions in losses.

Fifth Bankruptcy, Same Pattern

The 2004 Trump Hotels and Casino Resorts bankruptcy was Trump’s fifth major business bankruptcy and his fourth involving Atlantic City casinos, reinforcing a clear pattern: borrow heavily, operate unprofitably, and use Chapter 11 protection to force creditors to absorb losses while Trump personally retained ownership stakes and licensing fees. Academic analysis later noted that Trump’s ability to maintain personal wealth while his companies repeatedly failed demonstrated his skill at structuring deals to insulate himself from downside risk at the expense of investors, creditors, and employees. Within five years, the reorganized company—renamed Trump Entertainment Resorts—would file for bankruptcy yet again.