Trump’s casino business goes bust for the third time
Atlantic City casinos hit by recession, but Trump attacks move into bankruptcy
Wednesday 18 February 2009
Donald Trump faces new trouble at the roulette tables with the Atlantic City-based casino group that operates under his name yesterday filing for bankruptcy protection in a New Jersey court after missing an extended deadline on a $53m bond payment.
The filing by Trump Entertainment, which operates three large casino resorts in Atlantic City – the Taj Mahal, the Trump Plaza Hotel & Casino and the Trump Marina Hotel Casino – was|approved by the company’s board late on Monday evening. It is the third time the company, in its various incarnations, has succumbed to bankruptcy.
It is a not a move, however, that comes with the blessing of Mr Trump. Though he holds 28 per cent of the company’s stock, he resigned from the board last Friday after it became clear it would give in to pressure from bondholders to enter bankruptcy. The same bondholders had rejected an earlier offer from Mr Trump to buy the troubled company and take it private.
“Dialogue is continuing” on a restructuring of the company’s capital, its chief financial officer, John Burke, said in a statement upon the filing. “The bankruptcy will provide a forum for a prompt and efficient restructuring” of debt, he added. The company listed assets of $2.1bn (£1.5bn) and debt of $1.74bn as of 31 December last year.
The failure of the business in Atlantic City does not directly affect Mr Trump’s other businesses in property development around the US and beyond. He recently insisted that his plans to build a luxury golf course with attached housing at a site in east Scotland would shortly go ahead, even if the housing component remained on hold pending a turnaround in the property market.
“While The Trump Organisation grows and flourishes, Trump Entertainment … has languished,” Mr Trump noted in a statement issued after his board resignation. “The Trump Organisation’s portfolio of residential, commercial, hotel, and golf properties has expanded all over the world, while Trump Entertainment has yet to diversify outside of Atlantic City.”
The latest version of Trump Entertainment emerged from bankruptcy courts in 2005 and managed to turn a few quarters of profit even as it|embarked on new capital investments, including the construction of a luxury tower at the Taj Mahal. Like all its competition in the gambling industry, however, it has been buffeted by the strong headwinds of the recession.
Atlantic City was already facing competition on the East Coast as other states expanded slots gambling; the swooning US economy has hardly helped. In December, the city posted its largest decline in gambling revenue in history, with takings down 18.7 per cent. State officials calculate January revenues were down by 9.7 per cent.
In his statement, Mr Trump did nothing to disguise his frustration. “Now I will study and watch as the horrible and outrageous fees being paid to lawyers and consultants will suck the blood from the company,” he said. He added that representatives of the bondholders, which include US Bank and Bally Gaming of Las Vegas, had made a “series of bad decisions” in the running of the business and had “encouraged wasteful spending, which has led to severe problems”.
- 1 Crystal meth addict 'gouged out his eyes and ate them' while high on drug, Australian MP claims
- 2 Saudi Arabia 'seeking to head United Nations Human Rights Council'
- 3 Irish people are travelling home from all over the world so they can vote to legalise gay marriage
- 4 Witch doctor arrested after forcing newborn baby to walk in Indian village
- 5 Arsenal fan asks the Queen for tickets to the FA Cup final - gets a reply from Buckingham Palace
Ireland's same-sex marriage vote: Dublin in party mood ahead of historic poll result
Saudi Arabia 'seeking to head United Nations Human Rights Council'
Toddler throws a tantrum at the White House – in front of Barack Obama
Irish people are travelling home from all over the world so they can vote to legalise gay marriage
Witch doctor arrested after forcing newborn baby to walk in Indian village
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
Report finds that Britain's wages are the most unequal in Europe
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...