Since 1995 to 2003, Trump Hotels & Casino Resorts Inc. has been reporting annual losses, which resulted in the decrease of the company's equity base and an increase in its leverage. In 2003, Donald Trump was struggling with his collapsing empire. This case discusses the issues the company were facing and how it decided to rework the capital structure and reduce its debt levels in the hope of escaping a cash squeeze.
The teaching objective of this case is to illustrate restructuring alternatives and create a discussion of the pros and cons. This case will make students think and analyze as part of the Management of Trump Hotels & Casino Resorts Inc. with regard to recapitalization plans.