Trump Entertainment files for bankruptcy
CHICAGO (Reuters) - Trump Entertainment Resorts Inc, the casino operator named for Donald Trump, filed for bankruptcy protection on Tuesday as recession and declining gambling revenues battered the company and its rivals.
The Chapter 11 filing marks the third plunge into bankruptcy for the company, which was created out of a restructuring in 2005. It also underscores the struggles facing the casino business as recession squeezes casino gambling.
Trump Entertainment owns and operates three casino hotels in hard-hit Atlantic City, New Jersey, including the Trump Taj Mahal, Trump Plaza and Trump Marina.
The company did not request debtor-in-possession financing to operate during its restructuring and said it would continue to run as normal.
"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," Trump Chief Executive Mark Juliano said in a statement.
Nine affiliates of the casino operator including Trump Plaza Associates, Trump Plaza Associates, Trump Marina Associates and Trump Taj Mahal Associates simultaneously sought protection, according to the filing.
Trump had assets of about $2.1 billion and total debts of about $1.74 billion on December 31, 2008, it said in its filing with the U.S. Bankruptcy Court for the District of New Jersey.
The company, eager to conserve cash, missed a $53.1 million bond interest payment due on December 1 as a sharp downturn in consumer spending hit casino revenue, prompting bondholders to push for bankruptcy.
Experts had been looking for a Chapter 11 filing from Trump since it missed the December 1 bond interest payment.
"It had been moving in this direction for two months," said KeyBanc gaming industry analyst Dennis Forst.
"I think (restructuring) could take a while," he said. "Obviously, they weren't able to restructure it with the debt holders in the two months they had."
The filing comes days after the casino operator's namesake founder said he would resign from the board over disagreements with bondholders who wanted the company to file for bankruptcy.
Friday's statement did not say when Trump's resignation would be offered or take effect. His daughter Ivanka Trump also said she was resigning.
Trump, a very public and flamboyant figure in an industry filled with colorful, headstrong executives, said the company represents less than 1 percent of his net worth, and that "my investment in it is worthless to me now."
No stranger to bankruptcy, Trump Entertainment Resort Holdings went into Chapter 11 in 2004, from which it emerged a year later with Trump having relinquished the position of CEO.
Casino companies have been hurt in the last year as the gambling boom fizzled and tight credit markets stifled growth plans. Meanwhile, the Chinese government has made efforts to slow down the Macau gambling market.
The sector now faces a wave of restructurings. In May, the privately held casino operator Tropicana Entertainment LLC filed for Chapter 11.
The Dow Jones U.S. Gambling Index has fallen some 83 percent since its lifetime high reached in October 2007.
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