Trump Entertainment Resorts files for bankruptcy
Trump Entertainment Resorts filed for Chapter 11 bankruptcy on Tuesday, the third time that the company founded by Donald Trump has sought protection from creditors and the latest sign of how the growth of casino gaming in the Northeast has decimated the Jersey Shore town.
The company's properties include the Trump Plaza, which is due to shut its doors Sept. 16, costing about 1,600 workers their jobs and the Taj Mahal, an Indian-themed property that media reports say could shut its doors on Nov. 13. The reports indicate that the 2,825 Taj workers may get federally mandated layoff notices today. Caesar's Entertainment closed its Mardi Gras-themed Showboat on Sept. 1, with a loss of more than 2,000 jobs
According to a filing in U.S. Bankruptcy Court in Wilmington, Delaware, Trump Entertainment has liabilities of between $100 million and $500 million, and assets of no more than $50,000. The company last went through bankruptcy in 2009.
Negotiations with UNITE Here Local 54, the main casino workers union, have stalled and no buyers have emerged for the Taj Mahal, one of the biggest buildings in New Jersey. A spokesman for UNITE Here couldn't immediately be reached for comment.
Unlike Revel, the glitzy $2.6 billion resort which shuttered its doors on Sept. 2, putting more than 3,000 people out of work, the Taj Mahal could do well if it was managed "correctly" said Alan Woinski, the president of Gaming USA, a consulting group based in Paramus, New Jersey, in an interview.
Woinksi and other casino experts have long argued that the Revel was the wrong sort of resort for Atlantic City. "You are going to lose money if you keep (Revel) the way it is," Woinski said in an interview. "The Tropicana actually is gaining share every month ... Over the past few months, you have started to see the cream rise to the top."
Resorts International, the first Atlantic City casino to open its doors, and Borgata Hotel Casino and Spa are also doing well, he said. The same can't be said for the casino properties that were once controlled by the real estate developer-turned reality television star.
Donald Trump owns a 10 percent stake in Trump Entertainment 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 luxury.
"Mr. Trump brilliantly left Atlantic City more than 7 years ago and has not been back," spokesman Michael Cohen told MoneyWatch in a press release.
Indeed, the billionaire who is a more relevant player in the Jersey Shore town these days is activist investor Carl Icahn. Not only does Icahn control the Tropicana Casino Resort but he also in the largest creditor for Trump Entertainment. The billionaire has reportedly blocked one sale for Trump Plaza. He didn't respond to an email message left with an assistant seeking comment for this story.
Icahn, though, may hold onto the properties for a while until market conditions improve. He also may not be in any rush to develop the Atlantic City properties. The billionaire acquired Las Vegas Fontainebleau property out of bankruptcy in 2010 for $150 million and the property has set idle since then. It has never opened.