Trump Entertainment Resorts Files Bankruptcy, Trump Resigns from Board

Trump Entertainment Resorts filed for Chapter 11 bankruptcy protection on February 17, 2009, after missing a $53.1 million bond payment, marking the sixth bankruptcy of a Trump casino company in 18 years. Just four days before the filing, on February 13, Donald Trump resigned as chairman of the company’s board, and his daughter Ivanka Trump also quit the board, as Trump distanced himself from the failing enterprise. The company faced $1.2 billion in debt amid the 2008 financial crisis and the collapse of the Atlantic City gaming market. Trump’s ownership stake was reduced to just 10 percent, and he later fought to remove his name from the casinos entirely.

Resignation and Name Dispute

Trump’s resignation from the board came after months of disputes with the company’s bondholders and new major investors Carl Icahn and Andrew Beal, who had acquired significant stakes in the struggling casino operation. Trump argued in bankruptcy court that he would fight any attempt by the Icahn-Beal team to continue using his name and likeness on the properties if he disagreed with their management decisions. However, he ultimately signed an agreement with Avenue Capital Group in which he would receive 5 percent stock in the reorganized company plus another 5 percent in exchange for allowing perpetual use of his name and likeness—demonstrating that even in failure, Trump monetized his brand.

Suing to Remove His Name

By August 2014, after the reorganized company continued to struggle, Trump filed a lawsuit demanding removal of his name from the two remaining casinos—Trump Taj Mahal and Trump Plaza—claiming they had “fallen into disrepair” and were damaging his brand. This remarkable move saw Trump actively trying to disassociate himself from properties that bore his name, arguing that their poor condition was harming his reputation. The lawsuit highlighted Trump’s primary business strategy: license his name for upfront fees and royalties, but retain no real operational responsibility or personal financial risk.

Walking Away from Atlantic City

The 2009 bankruptcy effectively ended Trump’s active involvement in Atlantic City casino operations, though his name remained on properties for years afterward. Both Trump Plaza and Trump Taj Mahal eventually closed—the Plaza in 2014 and the Taj Mahal in 2016—ending Trump’s Atlantic City casino legacy in complete failure. Over 18 years and six bankruptcies, Trump’s Atlantic City casinos had destroyed billions of dollars in bondholder value, left contractors and small businesses with massive losses, and cost thousands of jobs. Yet Trump personally walked away having extracted millions in fees, salaries, and licensing payments throughout the decades of failure, exemplifying his pattern of profiting from failure while creditors and investors absorbed the losses.