Submitted by Jen Jones on Thu, 06/25/2009 - 12:20pm
From what you've seen about him on TV and in the news, you probably know Donald Trump doesn't like to lose. Whether it's a business deal, a real estate purchase, or just an argument with a contestant on The Apprentice trying to avoid the axe, Trump wants to be in control -“ and he usually is. But this past February, it was Trump who was up against the ropes. He was in a dispute with the bondholders of Trump Entertainment Resorts, Inc. (TER) over whether the company should file bankruptcy -“ for the third time.
TER owns and operates three casinos in Atlantic City that carry the big boss's name: Trump Taj Mahal, Trump Plaza, and Trump Marina. In connection with TER's last bankruptcy in 2004, Trump had to give up his CEO position and control over the day-to-day operations of the casinos. But he was still a member of the board, as was his daughter, Ivanka Trump. Soon after emerging from the last bankruptcy, the recession took hold, stifling profits for TER and quickly leading to yet another dangerously lopsided balance sheet. When the company missed a $53 million bond interest payment at the end of 2008, a third round of bankruptcy seemed inevitable.
Still, Trump insisted the company stay out bankruptcy. He wanted to buy TER and take it private. When the bondholders dug in their heels and refused, Trump threatened to resign from the board. That didn't work either; the bondholders were bent on moving forward with the bankruptcy. And they did. Just days later, TER filed bankruptcy under Ch. 11. The numbers weren't pretty: as of December 31, 2008, the company had $2.1 billion in assets and $1.74 billion in debt.
True to his word, Trump resigned from the board. Ivanka followed suit, giving up her spot on the board too. At the time, the big boss dismissed TER, saying his stock in the company represented less than one percent of his net worth and was "worthless- to him after the bankruptcy filing.
Fast-forward to June, and Trump has changed his tune. Now, he wants the company back again, and he recently made an offer to buy it out of bankruptcy. Once again, though, he's up against the bondholders, who've made a purchase offer of their own. The details of the offers have been kept confidential. Mark Juliano, the current CEO of TER, has said the board will consider both offers, but that the company needs an offer that would allow it to maintain a good cash-flow and a healthy balance sheet -“ something it has struggled to do, especially under the pressures of the current recession.
TER is definitely not alone in its plight. Industry-wide, gambling revenues are way down. The Dow Jones U.S. Gambling Index has tumbled 83 percent from its all time high in October 2007. And, the Atlantic City casinos are dealing with added pressure of competition from new slot parlors in neighboring Pennsylvania and New York. The city's casinos saw record revenue declines in 2008 and a 16 percent drop-off so far through May of this year.
Who knows whether Trump will get what he wants this time and take over TER again. But one thing's for sure: he'll have his hands full as he tries to steer the company back on track, especially in today's economic climate.
From: The Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Fayetteville, and Wilson. Call (toll free) +1-833-627-0115, to set up a free, confidential debt consultation. Visit www.billsbills.com for more information.
Debts Hurt! Got debt? Need help? Get started below!
Serving All of North Carolina
Bankruptcy Attorneys Raleigh NC (North)
6616 Six Forks Rd #203 Raleigh, NC 27615 North Carolina
Tel: (919) 847-9750
Bankruptcy Attorney Fayetteville NC
2711 Breezewood Ave Fayetteville, NC 28303 North Carolina
Tel: (910) 323-2972
Bankruptcy Attorney Durham NC
1738 Hillandale Rd Suite D Durham, NC 27705 North Carolina
Tel: (919) 286-1695
Bankruptcy Attorneys Wilson NC
2215 Nash St N Wilson, NC 27896 North Carolina
Tel: (252) 234-9194
Bankruptcy Attorneys Greensboro NC
2100 W Cornwallis Dr. STE O Greensboro, NC 27408 North Carolina
Tel: (336) 542-5993
Bankruptcy Attorneys Southport NC
116 N Howe St. Suite A, Southport, NC 28461 North Carolina
Tel: (910) 218-8682
Bankruptcy Attorneys Wilmington NC
116 N. Howe Street, Suite A Southport, NC 28461 North Carolina
Tel: (910) 447-2987