Donald Trump’s Taj Mahal casino in Atlantic City, N.J., nearly flushed Forest Jenkins’ company Triad Building Services down the toilet. (Photo: NJTV News via YouTube), America's Top Givers: The 25 Most Philanthropic Billionaires, EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Can We Save Social Media? He says the way Trump handled the contractors shows the candidate is shrewd and clever, qualities his fans seem to like in the presidential candidate. But I told him, I have plan. A day later, he got his answer: The money’s coming in two weeks. "I would never have taken a junk bond," Rosenberg said. Trump managed to open the Boardwalk casino on April 2, 1990, though not quite as he had planned. Meanwhile, his nephews now run a glass glazing company called APG International. If he had to sell everything quickly, according to accountants Kenneth Leventhal & Co., he’d be worth as little as negative $295 million. 1991: Trump Taj Mahal. One of the hardest hit was John Millar, a marble supplier who was owed $3.9 million. "I served for many years as vice president," he continued, "and have a short story to tell you about part of that time.". Lawsuits began piling up. Trump, after becoming the presumptive Republican nominee at least a month earlier than even he expected, hes being hammered by Democrats and denied the welcome mat from his own party. "It hurt. He pressed Trump’s people again, and got a familiar answer: You’ll get the money in two weeks, no problem. Trump Taj Bankruptcy Left Many Contractors Angry June 30, 2016 8:27 am ET The contractor who provided the onion domes for the Taj Mahal casino had to eat $2 million in losses. He brought the photos to a Trump lawyer named Patrick McGahn, a no-nonsense ex-Marine. The casino opened, not quite finished, in April. Rosenberg finished the work in February 1990. Trump asked him. Millar eventually had to lay off workers, shut down his business Avalon Commercial, close many of his retail stores and borrow from friends to make ends meet, according to court documents and Millar’s lawyers and former employees. Steven P. Perskie, New Jersey’s top casino regulator in the early 1990s, said about Trump, “He put a number of local contractors and suppliers out of business when he didn’t pay them.” Didn’t pay construction bill: When Trump declared the Taj Mahal hotel as bankrupt, it nearly caused the collapse of Trias Building Specialties. Workers lost their jobs. Thomas Roofing did not respond to phone calls for comment. Strapped for money, some contractors sold them immediately, getting a fraction of what they were worth at maturity. "If we were planning to go out of business, we could do what Donald Trump did. A toilet maker in Atlantic City It was 1988 when Forest Jenkins won a $200,000 contract to install toilet partitions at Trump's Taj Mahal in Atlantic City. Trump's bankruptcy meant that several contractors were never paid for their work and materials. History Trump Taj Mahal era: 1990–2016. The Trump Taj Mahal casino and hotel, owned by Trump Entertainment Resorts Inc., stands in Atlantic City, New Jersey, U.S., on Sunday, May 8, 2016. ", Atlantic Plate and Window Glass was about three-quarters through the job and was owed some money from Resorts International before it would continue work. More contractors sued Trump, but it was too late to collect what they were due. The bonds would eventually pay in full, but the holders had to wait at least several years. W hen Donald Trump opened the towering Trump Taj Mahal Casino in ... of job losses and put dozens of local contractors out of ... $500m makeover of Trump’s Taj … “I’ll check it out, Marty, and call you right back,” the man said. George Jenkins, the bathroom partition man who had to lay off his brother, was shocked when Trump balked at paying the $232,000 he was owed, according to his daughter, Beth Rosser. Thomas Roofing, owed $1 million for HVAC work and a roof, argued that Trump officials committed fraud because they “misrepresented” that they had enough money to pay though they knew they didn’t, thereby inducing the company to keep working. Two months later, Molded Fiber Glass was still waiting. We could lose everything.”. “My father was old school,” says Rosser. © 2021 Forbes Media LLC. "Absolutely, we always do. ATLANTIC CITY, N.J. (AP) — Weak from heart surgery and a sepsis infection that would soon kill her, Patricia Paone was resting at home last summer when an apparition appeared on the TV — a famous businessman who had struck a deal with her husband years before. The trouble wasn’t enough to keep Molded Fiber Glass from doing work for Trump again. The contractor who put in the bathroom partitions had to lay off his brother. The lawsuit was settled two months later for an undisclosed amount. Trump, who once bragged that he was the “King of Debt,” owed $70 million to 253 contractors who worked on the Taj and who, in turn, hired thousands of workers. She then moved to the Taj Mahal in 1990. "The day of the meeting, which was around lunch time, I get a telephone call, from Donald's attorney. But for Paone and others like her — the dozens of contractors and their families who never got all they were owed — it could have happened yesterday. You need to give me some leverage and some time.' But we'd never do that. The next year, when the casino collapsed into bankruptcy, those owed the most got only 33 cents in cash for each dollar owed, with promises of another 50 cents later. I'm not a Democrat. But we had the ability to get our creditors off our case for a time, and we had a bank line that gave us working capital to carry us over.". Rosenberg, according to the A.P., held $1.1 million of that debt. (Photo: NJTV News via YouTube), Earlier this month, when Hillary Clinton spoke on the Atlantic City boardwalk, she was introduced by a man who was not there to praise her, but to bury Donald Trump. “We took a beating,” former Hastings controller Howard Black says. Some couldn’t afford the negative cash flow, and the money squeeze started rippling out from company to company. He laughed. Rosenberg, whom Trump would eventually owe $1.1 million, walked down the hall and entered his brother’s office. Soon after the opening, Trump owed $70 million to 253 contractors employing thousands who built the domes and minarets, put up the glass and drywall, laid the pipes and installed everything from chandeliers to bathroom fixtures. By 2016, the casino had closed completely bankrupt. Later in 1988, Trump acquired the Taj Mahal Casino in Atlantic City, New Jersey, in a transaction with Merv Griffin and Resorts International. The Trump Taj Mahal – often called Trump's most ambitious project – was ridden with problems from the beginning. ", And his former client? He later folded the Taj into a publicly traded company holding other casinos. ATLANTIC CITY — Contractors for Hard Rock International were busy Wednesday removing the iconic fountain that once greeted guests at the entrance to Trump Taj Mahal Casino Resort. He said, 'What's this I hear about a meeting?' I tell him, and he says, 'How do we stop this meeting? Do I think she's the cleanest person? "I knew where I was going with Trump," Rosenberg said. Trump was known for not paying contractors whose work he deemed inferior, but Rosenberg he fielded no such complaints. He called the Trump Organization and was told, "Marty, you'll have your check in two weeks." Lundy, the contractor with the sick grandfather, also took Trump up on his offer of working for him in Atlantic City again. Said Trump: "O.K., you've got the job.". Is It Time To Change Director Board Compensation In Private Real Estate Firms? But, he added, "she has some background in the world. An invoice sent a few weeks earlier for $1.4 million still hadn’t been paid. One of the reasons some contractors heard for the delay in pay: Trump said he needed to complete audits first to make sure they weren’t overcharging. As he was walking into a meeting with contractors to share strategies about how to deal with Trump, landscaper Herman Caucci asked him what he planned to do: Stick it out in hopes of getting all he was owed, or take cash at a discount? Caucci, who himself was owed more than $500,000, says Millar agreed to take 10 cents on the dollar, but court documents suggest he got about 30 cents on the dollar over the next year. “He’s a crook!” she roared, according to a son who was with her that day. I've also written about technology and public policy – particularly about renewable energy – for Discover and IEEE Spectrum and obscure cheese for Gourmet. When I'm not thinking about small business, I'm dreaming about trains, and hunting down old railroad artifacts. As he recalled in an interview a couple weeks ago, it was a $12 or $13 million contract. Trump was denying he was in financial trouble: “I have a tremendous amount of cash,” he told the Washington Post that March. Morrison of Molded Fiber Glass was getting desperate for his money and so he turned to Irwin Tobman, a field supervisor in Atlantic City overseeing the installation of the domes and minarets. And I began my career peeking into the dark corners of the legal system for The American Lawyer. , Rosenberg called the 20 or 30 suppliers to whom he still owed money for the Taj work. Marty Rosenberg, former vice president of Atlantic Plate Glass, was among two dozen contractors and their survivors caught in the aftermath of the Taj bankruptcy who were interviewed by The Associated Press. Trump, striking workers explained, had always agreed to … Rosenberg believes that eventually he got about 70 percent of what he was owed, though the A.P. Next.”. After the Taj opened in April 1990, the self-anointed “King of Debt” owed $70 million to 253 contractors employing thousands who built the domes and minarets, put up the glass and drywall, laid the pipes and installed everything from chandeliers to bathroom fixtures. It was April 1990, and Mr. Trump was officially opening his third gambling resort in Atlantic City, the biggest project of his career: the $1 billion Trump Taj Mahal. But for many of them, it could have happened yesterday. “We got next to nothing,” says Michael MacLeod, whose 40-person studio made the giant elephant statues at the entrance to Taj. Tobman says Trump’s cash crunch left Morrison with no money to pay the dozen companies he had hired to help with the Taj work. Barbara Kerr, a friend who had lent him $73,000, says that Millar had his hands in ventures outside of contracting, but that it was the work at the Taj that did him in. Next Its website showcases at least 36 completed projects since 1993, mostly in the mid-Atlantic area, but also a half dozen overseas, in Europe and the Middle East, though few in recent years. However, it eventually closed in 2016. Trump also threw in a “right of first refusal,” meaning the contractors would get future work at the Taj if they matched the best bid from others. The contractor who supplied the Carrara marble from Italy ended up filing for personal bankruptcy. In August 1990, the truth finally came out. The place was still unfinished, with the facade facing the Atlantic Ocean lacking much of its ornamentation. It took years to get the rest, assuming the companies survived long enough to collect. The casino was opened in April 1990, and was built at a total cost of $1.1 billion, which at the time made it the most expensive casino ever built. I have reported on entrepreneurs, and the politics and policies that affect them, for The New York Times and Inc. magazine, among others, for more than a decade. “I really need the money,” Lundy said as he handed over photos of his grandfather. But "as the president of the Untied States, he scares the death out of me. But Morrison paid them anyway, Tobman recalls, by borrowing the money. Others caught up in the Taj turmoil didn’t fare as well. Trump Taj Mahal Casino Contractors Say They Were Wronged The Trump Taj Mahal Casino and Resort, which opened in 1990, finally closed on Oct. 10, at 5:59 a.m. Many contractors, according to the A.P., retrenched or even went bankrupt. “Morrison knew no other way but to pay his bills,” says Tobman. But I said, 'Once I organize this meeting, there's no stopping this. Rosenberg told me he's not particularly political. "I didn't get a check, and that check was for $1.2 - $1.3 million.". Documents filed with regulators suggest Trump gave Paone about a third of what he was owed over the next year. Between 1990 and 1996, Mr. Trump persuaded creditors to revamp his original restructuring agreement again and again. A quarter of a century had passed since Donald Trump refused to pay $1.2 million for the paving stones her late husband installed at Atlantic City’s Taj Mahal casino. The contractor who provided the onion domes atop the Taj had to eat $2 million in losses. Lupu had started with Trump in 1984, when he opened the Trump Plaza. Molded Fiber Glass never removed its domes, choosing instead to join with Lundy and 46 others in a negotiated settlement with Trump for cash equal to 33 cents of each dollar owed, plus 50 cents in convertible bonds, according to Morrison’s book. Millar built back the retail side of his business to 14 stores before dying in 2008. “He would shake your hand and look you in the eye,” says his son, Philip Paone. She knows people. Many contractors didn’t know what to think. Trump, who once bragged that he was the “King of Debt,” owed $70 million to 253 contractors who worked on the Taj and who, in turn, hired thousands of … “I can’t listen to this.”. Trump was “stringing us along,” says Tobman. “I don’t know, Herman, I need the money,” Caucci recalls Millar responding before the March 1990 meeting. Trump officials denied the charge, but the judge overseeing the case expressed frustration with the varying reasons they had given in depositions for not paying — and raised the specter of an investigation for perjury, according to published reports at the time. Nobody's saying it didn't hurt. Her father never made it out of seventh grade, she says, and built his businesses on trust, no contracts. Marty Rosenberg introduces Hillary Clinton at a rally in front of the former Trump Plaza Hotel and... [+] Casino in Atlantic City. "I spoke to my brother and said, " 'Harry, we've got a problem.' "My plan was simple: I would call a meeting at Resorts International. Regular checks for work completed stopped arriving in the mail. The initial construction of the … The company helped with the roof of the Trump Parc East, a residential building overlooking Central Park in Manhattan, according to Tobman. "What we tried to do as a group is get all the small contractors paid, because they would get bankrupted.". "If the Taj Mahal had been started by Donald trump, we would never have taken the job. The company refused to comment. That was the only time Rosenberg ever met Donald Trump. "I have no animosity toward Donald Trump," he told me. During the early days of the Trump Taj Mahal Casino Resort, more than 50,000 people came to visit every day. Over his protests, regulators unsealed a devastating report written by Trump’s own accountants: The “billionaire” had been burning through cash in his personal accounts so fast in the spring that he would have had nothing by end of the year if he didn’t take drastic action. “Anytime I went to Atlantic City and I’d see that Trump sign, I’d think of the little guys,” says bankruptcy lawyer Arthur Abramowitz who worked with contractors for years after the casino itself went bankrupt. Morrison ended up having to write off $2 million of the $3 million that Trump owed him, according to his book. BOSTON -- Donald Trump is in arrears on more than $50 million in contractors' bills for his Taj Mahal Casino in Atlantic City, the construction manager of the project said Monday. Negotiations for payment, such as they were, dragged on for months. The contractor who supplied … By the start of 1990, Trump was desperate for the contractors to finish so he could begin taking money from slots players and high rollers. The stress was also building at Hastings Pavement, the company doing the paving work. By then, he had been paid somewhere between $11 and $12 million. Trump had a reputation as a relentless haggler with contractors, always suspecting that they were cheating him. ‘Booking.com’ Is A Trademark – Does This Matter To Your Business? A quarter of a century had passed since Donald Trump refused to pay $1.2 million for the paving stones her late husband installed at Atlantic City's Taj Mahal … Desperate for cash, contractors became easy targets for a new offer from Trump: Agree to less than they billed, and he’d pay the lower amounts immediately. The real estate mogul told state regulators in 1988 that companies that sell junk bonds were nothing but “junk” companies. Far from being overstretched, he told Newsweek, he was looking to expand: “I think the people with a lot of cash —and I have a lot of cash — are going to be able to make beautiful deals in the next few years.”, “Naturally, you assumed you’d get paid,” Molded Fiber Glass CEO Morrison wrote in a book about the Taj published in 1994. Of all the real estate and casino deals in Trump’s long career, the Taj arguably sheds the most light on how the would-be U.S. president handles crises. But for Paone and others like her — the dozens of contractors and their families who never got all they were owed — it could have happened yesterday. Construction of what was originally known as the Taj Mahal commenced in 1983 by Resorts International, owner of the neighboring Resorts Casino Hotel, with an estimated budget of $250 million. After college, Rosenberg said, he joined the family business, Atlantic Plate and Window Glass. The contractor who supplied the Carrara marble from Italy ended up filing for personal bankruptcy. He ordered crystal chandeliers from Austria; hand-sewn carpets from Britain; 70 onion domes, one of them 50-foot high; the Carrara marble from Italy. "I said, 'I want you know that you're not going to get your money right away, but you're going to get every dime. Frank Lundy, owed $580,000 for overseeing construction clean-up at the Taj, was visiting his sick grandfather; the older man’s face was half frozen from a stroke, tubes sticking out his arms. The contractors could band together to negotiate for payment. Then he got an idea. Creditors ultimately agreed to a restructuring of the Taj Mahal's debts, and the company was in and out of bankruptcy court in just six weeks. Opening day was pushed back twice, to April 2, only six weeks before a $47 million bond payment came due. I respect her service. It was his biggest gamble, the “eighth wonder of the world,” as he dubbed it. " He didn't get his check. “A handshake meant everything.”. You may opt-out by. Taj Mahal contractors were told to take less than they were owed. Yes, We Have No Choice, Gender Bias: Trademark Act Never Contemplated A Woman Or Gay Male President, Cannabis Challenges Differ In Each State Where It’s Newly-Legal, 5 Unexpected Places To Find Your Next Great Business Idea. Tobman had been told earlier by a Trump official that the delay in sending the check was due to a “slight glitch.”, “We got to get the job done,” Tobman recalls the Trump guy saying. 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