Trump Entertainment’s Bankruptcy Plans
Donald Trump’s casino company, Trump Entertainment Resorts Inc., will once again be filing for bankruptcy. This will be the fifth New Jersey casino that’s in danger of closure.
Trump Taj Mahal and Trump Plaza
Trump Entertainment, based in Atlantic City, owns two properties in Jersey — the Trump Taj Mahal and the Trump Plaza. The Plaza is scheduled to cease operations on Sept. 16. Allegedly, the Taj Mahal may also be shutting in mid-November. The properties are suffering as a result of declining revenue, brought on by competition, as well as high labor costs, as well as taxes on real estate.
Robert Griffin is chief executive officer of Trump Entertainment, as Trump himself does not actively manage the company. New York-based billionaire Carl Ichans funds are, according to public filings, Trump Entertainment’s largest creditor. And a bankruptcy court reorganization could give Ichan two additional hotels in Jersey. Icahn is also in control of 68 percent of Vegas-based Tropicana Entertainment.
A Fight Brewing?
A bankruptcy filing could also set the stage for a fight between Trump and Icahn. Trump has filed a lawsuit asking for his name to be taken off the properties. As part of an earlier restructuring, Trump licensed the brand to the company on a royalty-free basis. And that agreement prohibits Trump from using the name for gambling businesses in six East Coast states, including New York. “It’s not that we’re demanding rights,” Trump said in a telephone interview. “We just want the name taken off the building. We have the hottest hotel portfolio in the world right now. They are not operating the hotel in accordance with our very high standard.”
Trump Taj Mahal
According to a filing with the state’s Division of Gaming Enforcement, the Trump Taj Majal lost $35 million on revenue of $108 million during the first six months of 2014. In the same time period, Trump Plaza showed a loss of $9.8 million on revenue of $28 million.
Source: Bloomberg, Trump Entertainment Plans to File for Bankruptcy Again, September 8, 2014