|The company owns
Trump Plaza, closing in a week, and the Taj Mahal which could close on 13
Resorts filed for bankruptcy Tuesday and threatened to shut down the Taj Mahal
Casino Resort, which would make it the fifth casino to close this year.
The company owns Trump Plaza, which is closing in a week, and the Taj
Mahal, which has been experiencing cash-flow problems and had been trying to
stave off a default with its lenders. The company said the Taj Mahal could
close 13 November.
fourth such filing for the struggling casino company or its corporate
The company filed in US Bankruptcy Court in Wilmington,
Delaware, saying it has liabilities of between $100m and $500m, and assets of
no more than $50,000. It missed its quarterly tax payment due last month, and
says it doesnt have the cash to make an interest payment to lenders due
at the end of the month.
It also says both its Internet gambling
partners have taken steps to end their contracts with Trump Entertainment.
It said cost-cutting negotiations
with the main casino workers union have stalled, and that the company is
preparing notices warning employees the Taj Mahal may close on 13 November.
Absent expense reductions, particularly concessions from their
unions, the Debtors expect that the Taj Mahal will close on or shortly after 13
November, 2014 and that all operating units will be terminated between November
13, 2014 and November 27, 2014, the company wrote in its bankruptcy
Trump Entertainment has struggled since the day it emerged from
its last bankruptcy in 2010, having filed the year before. It came out of
bankruptcy with $350m in debt, and currently has more than $285m in debt.
Since emerging from their prior bankruptcy cases in 2010, the
debtors continued to face significant challenges due to the prolonged economic
downturn, increased competition from within the Atlantic City market and from
neighboring states, and the lingering effects of Superstorm Sandy, all of which
contributed to declining revenues, the company wrote. These
factors, coupled with the seasonal and capital-intensive nature of the
debtors businesses, high debt load, significant labor costs and
double-digit real estate tax increases, hindered the debtors ability to
operate successfully and negatively impacted the debtors liquidity
As of the end of July, the company employed 2,800
The company has been trying to reduce expenses and debt,
including selling its former Trump Marina casino for $38m to Landrys Inc,
which now runs it as the Golden Nugget Atlantic City. It also sold the Steel
Pier for $4.5m; a warehouse for $1.9m, and its former corporate offices in a
converted firehouse for $3.1m. That building now houses the Casino Reinvestment
It has been trying for years to sell Trump
Plaza. A deal to sell it to a California firm for $20m last year fell through.
The company also said it has been in negotiations with Local 54 of the
Unite-HERE union on cost-cutting measures it says it needs to survive, but that
the union has rejected them. Bob McDevitt, the union president, could not
immediately be reached for comment.
The concessions would be on top of
a separate $4m round of union concessions the company won in 2011.
Donald Trump owns a 10% stake in the firm, but no longer controls it.
He is suing the company to remove his name from the properties, which he says
have fallen into disrepair and do not meet agreed-upon standards of quality and
Three other Atlantic City casinos have closed this year, as the
industry struggles with competition in nearby states.
began the year with 12 casinos, but could end it with seven if the Taj Mahal
closes. So far this year, the Atlantic Club, Showboat and Revel have gone out
of business, with Trump Plaza closing next Tuesday.
If the Taj Mahal
closes, Trump Entertainment would have no remaining properties and would
presumably go out of business.