1991: Trump's corporation filed for Chapter 11 bankruptcy protection when his Taj Mahal casino in Atlantic City was billions of dollars in debt. Trump had to give up half his ownership in it as part of the deal struck.
1992: Trump owed more than $500 million on his Trump Plaza Hotel in Atlantic City, so Chapter 11 was filed again, with Trump giving up about half his ownership again, along with his salary.
2004: Trump Hotels and Casino Resorts, owing close to $2 billion, filed for Chapter 11 bankruptcy protection. Trump's stake in the company was reduced to 25%, and he no longer controlled it.
2009: This time it's Trump Entertainment Resorts that files for Chapter 11 bankruptcy protection after missing a $53 million bond interest repayment. Trump resigned as chairman after this, and his ownership shrank again. Say what you want about Trump but he has used legal skills working with a team of excellent money managers to use the legal Bankruptcy system and using the resources available to him to achieve success.
This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.
A case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a "reorganization" bankruptcy.
An individual cannot file under chapter 11 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d)-(e).
Today’s bankruptcy laws and practices in the United States emphasize rehabilitating (reorganizing) debtors in distress with a limited emphasis on punishing the debtor. The Bankruptcy Act of 1898 was the first to give companies in distress an option of being protected from creditors. The company could be put in an "equity receivership," a provision made much more formal and extensive in the United States during the 1930s. The economic upheaval of the Great Depression yielded additional bankruptcy legislation, in particular, the Bankruptcy Act of 1933 and the Bankruptcy Act of 1934. In a 1934 U.S. Supreme Court decision, the Court reveals that the primary goal of bankruptcy laws was to offer debtors a "fresh start" from financial burdens. In Local Loan v. Hunt, the Supreme Court asserts, "[I]t gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt."
It is a stringent structured process to save a debtor or a debtor company from total ruin. (h/t John Proteus)