Trump Casino Bankruptcy Fallout - NBC 10 Philadelphia

Trump Casino Bankruptcy Fallout

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    Trump Casino Bankruptcy Fallout
    The filing marked the third time in bankruptcy court for Trump Entertainment.

    ATLANTIC CITY, N.J. (AP) -- Fallout from a third Chapter 11 bankruptcy filing continued for Trump Entertainment Resorts on Friday after it learned that its stock will be delisted from the Nasdaq exchange.

    The company, which owns three Atlantic City casinos, said it does not plan to challenge the action. The delisting, which means its shares will no longer be bought or sold on the exchange, takes effect Feb. 26.

    It comes amid increasing questions about whether Trump Entertainment will be able to complete its proposed sale of Trump Marina Hotel Casino to Coastal Marina LLC, a company run by Richard Fields, a former protege of Donald Trump.

    The proposed price has already been reduced to $270 million from $316 million, and both sides had expected to complete the sale by May 26.

    But the bankruptcy has Coastal taking another look.

    "Coastal Marina is closely monitoring news and events in Atlantic City and needs to fully evaluate the developing situation and its effects on Coastal Marina's interests," the company said in a statement this week.

    On Tuesday, Trump Entertainment filed for bankruptcy protection, listing $2.06 billion in assets and more than $1.74 billion in liabilities. It was its third bankruptcy filing since 1992 as the company continues to struggle under debt that has hurt its efforts to compete with newer, better financed casinos.

    Its most recent bankruptcy, which ended in 2005, eliminated some of the debt. But the company still was left with a debt burden that became heavier as the economy worsened and slots parlors popped up in Pennsylvania and New York, siphoning off some of Atlantic City's most reliable customers.

    The company's stock has plummeted to just pennies a share, down from a 52-week high of $4.39.
    Donald Trump resigned as chairman of the company Feb. 13 after bond holders who hold an edge on the board of directors rebuffed his offer to buy the company and take it private.

    Two large questions loom over the proposed Trump Marina sale: Who would Coastal deal with after the company emerges from bankruptcy court (assuming it can exit by May, which doesn't appear likely)? And can Fields get enough financing to make the purchase?

    Coastal spokesman Charlie Leonard on Friday said the company expects to have adequate financing to do the deal. He declined further comment.

    If the deal falls through, Trump Entertainment would be able to keep a $17 million deposit that Coastal made last year.
    Analyst Kim Noland, from the Gimme Credit LLC research firm, was skeptical that the deal will happen, saying Coastal "likely hasn't obtained financing yet."

    In a note to investors this week, she wrote that if the Trump Marina sale doesn't happen, Trump Entertainment might not survive. She said the bankruptcy could last for more than a year.

    "The situation is a death spiral," she wrote.

    Trump Entertainment Chief Executive Officer Mark Juliano said he still expects the Marina sale to happen.

    "Nothing about this bankruptcy affects that deal," he said Friday. "We talk to them all the time, and they still expect to one day be the proud owner of Trump Marina."

    Juliano also said a bankruptcy court judge this week gave the company permission to continue to pay vendors on a regular schedule and to use cash on hand to fund day-to-day operations.

    Besides Trump Marina, the company owns the Trump Taj Mahal Casino Resort, its flagship property that just added a new 782-room, $255 million hotel tower last fall, and Trump Plaza Hotel and Casino.