SAN JUAN, Puerto Rico, Friday July 17, 2015 – Trump International Golf Club Puerto Rico filed for bankruptcy as Donald Trump, the billionaire real estate mogul who licensed his name to the property, upped his campaign for the White House.
The financially troubled golf club listed $9.2 million in assets against $78 million in debt, according to the petition filed in San Juan on Monday.
The golf club’s ties to Trump, who is seeking the Republican presidential nomination, nevertheless go no further than the name, Bloomberg reported.
Donald Trump isn’t involved in the operations of the golf course and a “difficult business climate in Puerto Rico” resulted in the owner’s financial woes, said Eric Trump, the presidential candidate’s son and an executive at the Trump Organization.
“We have zero financial investment in this course,” Trump told Bloomberg. “This has absolutely nothing to do with Trump. This is a separate owner. We purely manage the golf course.”
The resort has been in default of its obligations to Trump, moreover, according to Eric Trump.
The Puerto Rico resort, which opened in March 2004 as Coco Beach Golf, was renamed in 2008 after licensing the use of Trump’s name.
Trump, an avid golfer, is affiliated with 17 golf properties worldwide, according to his website. The golf division of Trump Organization Inc. owns and manages most of the courses.
The Puerto Rico property features two 18-hole championship courses in Rio Grande, which were designed by professional golfer Tom Kite. The 1,000-acre property has a 46,000-square-foot clubhouse and hosted the 2008 Puerto Rico Open, according to the Trump website.
“Prior to commencing this bankruptcy proceeding, the debtor began experiencing a substantial diminution in its cash flow due to Puerto Rico’s adverse economic situation, which has impacted the tourism sector of the island,” the company said in court papers.
The club received $26.4 million in municipal bonds four years ago to finance the resort’s construction, Bloomberg reported. They were downgraded to CCC- last month by Standard & Poor’s, earning junk bond status where it used to have investment grade, and mirroring Puerto Rico’s debt.
The island of 3.5 million racked up the highest debt per capita in the US as the commonwealth and its agencies borrowed for years to fix budget deficits as its economy shrank almost every year since 2006. Officials are now seeking to restructure the island’s $72 billion debt load.
Meanwhile, since announcing his decision to run for president, Donald Trump has campaigned on his wealth and success in business.
Last month, he created a furore by describing immigrants who illegally cross the border from Mexico as mostly criminals.
And while the Puerto Rico golf resort doesn’t affect the company financially, the Trump Golf business hasn’t been completely untouched by the real estate billionaire’s controversial comments on immigration. Sports network ESPN recently relocated its Celebrity Golf Classic from a Trump-owned course in Rancho Palos Verdes to the Pelican Hill Golf Club in Newport Beach.