Trump Resorts Latest Hotel Firm to Fall Victim to Economy
- Feb 18, 2009
As high-end resorts continue to feel the crunch of the staggering economy, the latest firm going down in the bankruptcy rolls is Trump Entertainment Resorts Inc. along with subsidiaries Trump Entertainment Resorts Holdings L.P. and Trump Entertainment Resorts Funding Inc. Those entities filed voluntary petitions for relief under Chapter 11 in United States Bankruptcy Court for the District of New Jersey in Camden. Donald and Ivanka Trump resigned as members of the board of directors of the company on Feb. 13. He was chairman of the board and a member of the board’s executive committee. She was a member of the board’s corporate governance and nominating committee. In the SEC filing, the Chapter 11 case listed a default or otherwise triggered repayment obligations under the registrants’ $1.25 billion 8.5 percent senior secured notes due 2015 and $493 million senior secured term loan agreement.” The company requested court approval to continue to pay its vendors in the normal course of business. Additionally, the company is not seeking debtor-in-possession financing as it currently has adequate cash resources to fund its ongoing business operations “We are focused on our goal of successfully restructuring our company to reduce our debt in order to strengthen our balance sheet during this difficult economic period. This filing will result in no immediate change in our daily operations, and we expect to make no changes regarding our operating structure or philosophy,” stated the company’s CEO, Mark Juliano, in a prepared statement. According to third quarter results, Trump Entertainment suffered a $102.2 million loss from operations for the three months ended Sept. 30. The sale of Trump Marina to Coastal Development L.L.C. remains on track for a definitive purchase price of $270 million with a targeted transaction completion date of May 28. Trump Entertainment Resorts Inc. owns, through its interest in holdings, and operates three casino resort properties: Trump Taj Mahal Casino Resort (pictured) and Trump Plaza Hotel and Casino, located on the Boardwalk in Atlantic City, N.J., and Trump Marina Hotel Casino, located in Atlantic City’s Marina District. Trump is a shareholder of the company and is not involved in its daily operations. The company is separate and distinct from Trump’s privately held real estate and other holdings, which the company understands encompasses substantially all of his net worth. Trump Entertainment Resort Holdings also went into Chapter 11 in 2004, from which it emerged a year later with Trump having relinquished the position of CEO. And Trump Entertainment isn’t the only resort hitting the skids. In November, The Yellowstone Club in Billings, Mont., one of the most exclusive resorts in the U.S., filed for Chapter 11 bankruptcy protection. The Associated Press reported that Yellowstone owes an estimated $343 million to creditors. The latest news accounts rumor a sell to an affiliate of CrossHarbor Capital Partners, under a deal outlined in bankruptcy court documents. The Yellowstone Club for the ultrarich had only been partially developed when it fell more than $400 million in debt last year. The nearly 14,000-acre club near Yellowstone National Park has 340 members. Elsewhere, Daufuskie Island Properties L.L.C.–which operates The Daufuskie Island Resort & Breathe Spa–filed for Chapter 11 bankruptcy protection recently at the United States Bankruptcy Court for the District of South Carolina. The Hilton Head company listed $97.1 million in assets and $88.2 million in liabilities on its schedules includes two golf courses, tennis courts, several restaurants, the Melrose Inn and an equestrian center.