Trump casino business files for Chap. 11
Monday, Nov. 22, 2004 | 9:32 a.m.
NEWARK, N.J. -- Donald Trump's casino empire filed for Chapter 11 bankruptcy protection after months of negotiations with bondholders over restructuring a crushing $1.3 billion debt.
Trump Hotels & Casino Resorts and numerous related operations filed for protection from its creditors Sunday in U.S. Bankruptcy Court in Camden, N.J.
They come even as Trump, the celebrity real estate developer and best-selling author, has returned to the spotlight with the smash hit television show "The Apprentice," which turned "You're fired" into a national catch phrase.
Messages seeking comment from Trump and company executives were not immediately returned today.
Trump Hotels have struggled with debt that has hampered efforts to maintain and expand Trump Marina, Trump Taj Mahal and Trump Plaza casinos in Atlantic City. The properties have been hurt badly by new competition from the Borgata Hotel Casino & Spa and other casinos.
He had announced a bankruptcy reorganization plan for the casino company last month under which he would give bondholders a stake but remain as chairman and CEO.
Jane Pedreira, an analyst for Lehman Brothers, said the reorganization should help Trump casinos stay competitive.
"This is not a doomsday scenario. He just needs to shrink his debt," Pedreira said. "When you have that much debt, you can't leverage up to affect any large-scale expansion."
It is the second time Trump casinos filed for bankruptcy court protection. In 1992, Trump Taj Mahal, Trump Castle and Trump Plaza ended up in Chapter 11, burdened by more than $1 billion in debt and hurt by the 1990-91 recession.
Trump later regained control of the casinos, but high interest payments ate away at the company's bottom line, making it impossible to finance capital improvements at a time when Atlantic City competitors were luring gamblers away.
Shares of Trump Hotels & Casino Resorts had been in the $2 range before an announcement in August that the company would seek bankruptcy protection. The price dipped to about 50 cents in the fall.
Trump emerged in the 1980s as New York's hottest developers, attaching his name to buildings, Atlantic City casinos and books, notably "Trump: The Art of the Deal."
After he climbed back from the troubles of the early 1990s, he chronicled his return to billionaire status in the 1997 book "Trump: The Art of the Comeback."
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