Trump Entertainment Resorts Inc, the casino company founded by Donald Trump, filed for bankruptcy after annual gambling revenue in Atlantic City, New Jersey, plunged the most on record.
The petition for Chapter 11 bankruptcy, filed four years after its predecessor company failed, listed less than US$50 million in assets and less than US$500 million in debt, a petition filed yesterday in the US Bankruptcy Court in Camden, New Jersey, showed.
Nine affiliates, including Trump Plaza Associates, Trump Marina Associates and Trump Taj Mahal Associates, also sought protection. An exhibit attached to the petition said the companies had consolidated assets of US$2.1 billion and debt of US$1.7 billion as of Dec. 31.
Trump Entertainment, the owner of three casinos in Atlantic City that already have been through bankruptcy twice, missed a US$53 million interest payment at the start of December, and a creditor-extended grace period to make the defaulted coupon payment expired yesterday.
Donald Trump quit the board on Friday, saying he disagreed with bondholders’ decisions. He said bondholders turned down an offer he made to purchase the company.
The 20 largest consolidated creditors without collateral backing their claims are owed about US$1.32 billion, court papers show. US Bank NA, as agent for noteholders, is listed as the largest unsecured creditor with a claim of US$1.31 billion.
Other unsecured creditors include: Bovis Lend Lease Inc, with a claim of US$7.5 million; Thermal Energy Limited 1, with a claim of US$1.9 million; Hess Corp, with a claim of US$1.4 million; and Casino Control Fund, with a claim of US$1.1 million.
Trump Entertainment has reported profit in just three quarters since emerging from bankruptcy in May 2005. Gambling revenue in Atlantic City fell a record 7.6 percent last year, its second annual decline, as the recession deterred gamblers and slot-machine competition from nearby states wooed others.
The casino company said on Dec. 1 it would skip payments to conserve cash and hold talks with lenders on restructuring its finances. Holders of most of the company’s US$1.25 billion in notes and Beal Bank Nevada, which is owed US$490 million, agreed not to exercise default rights for interest or principal payments until 9am New York time yesterday.
Trump Entertainment had US$1.72 billion in long-term debt as of Sept. 30, according to a regulatory filing. In December 2007, the company received a US$500 million loan from Beal Bank Nevada, a Las Vegas-based affiliate of Dallas-based Beal Bank.
Trump, 62, is a real estate developer and stars in the television show The Apprentice. Trump controls about 28 percent of Trump Entertainment’s stock, according to a March 21 regulatory filing. His daughter, Ivanka Trump, also quit the board last week.
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