So what happens after Donald Trump takes his company, Trump Hotels and Casino Resorts into a $1.85 billion pile of debt?
Well, bankruptcy of course.
Does he get fired? No.
Does he get his salary cut? Sure. Now his salary is only $2M per year.
This leads me to two conclusions:
First, bankruptcy court has become a standard, legal mechanism to reduce costs. Originally they owed $1.85B. But after bankruptcy, they are no longer accountable for that spending, and only owe $1.25B. Its a pretty nice deal. Think about it - these guys lost $2 BILLION. That is hard to do. I can't imagine how incompetent I'd have to be in order to lose that kind of money.
Second, this demonstrates the power of Donald Trump as a brand. Clearly, he's a mediocre manager that led his casino through bankruptcy twice. But, even after all his mistakes, the shareholders feel that his name on the brand is the most likely way that their investments will see positive returns again. Otherwise, they would have certainly said, "Donald, your're fired".
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