Trump Entertainment Resorts TRMP filed for Chapter 11 last Tuesday. The firm had failed to make interest payments on its debt earlier in the year, so effectively its fate had already been in the hands of its debt holders. On Feb. 13, Donald Trump resigned as chairman, and his daughter Ivanka also resigned her board seat.
And yet, Trump is moving forward with the development of a multimillion-dollar golf resort (including a golf academy, 950 holiday homes, 500 private family homes and 36 luxury golf villas) near Aberdeen, UK.
The reason for this recent venture comes down to one thing: good credit.
Earlier this month Trump stepped down from the board of his casino company after a dispute with its bondholders, saying his holding represented less than 1% of his net worth. Sounds a bit like another venture capitalist in the news of late: Bernard Madoff.
How does Trump’s demise resemble Madoff's? We will explore the credit issue in a future post.
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