Trump Entertainment Resorts

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Trump Entertainment Resorts, Inc
Private
Industry Gaming, Entertainment, Hospitality
Founded 1995
Headquarters Trump Taj Mahal, Atlantic City, New Jersey
Key people
 Robert F. Griffin,
Director, CEO, General Manager of Trump Taj Mahal[1]
David R. Hughes,
Chief Financial Officer
Donald Trump,
Founder & Former Chairman
Products Trump One
Rewards Card
Slogan One name says it all!
Website trumpcasinos.com

Trump Entertainment Resorts, Inc. is a gaming and hospitality company that owns and operates the Trump Taj Mahal hotel and casino in Atlantic City, New Jersey, United States. Formerly known as Trump Hotels & Casino Resorts, it was founded by Donald J. Trump, who was chairman of the board of directors until his resignation in 2009.[2] Bob Griffin is currently Director and Chief Executive Officer. Trump is no longer on the company's board, but was given stock in the company for its use of his name and likeness.

History

Donald Trump began purchasing properties along the Atlantic City boardwalk in the early 1980s and received a gaming license from New Jersey's Casino Control Commission (CCC) on March 15, 1982.[3] He had planned to build his own casino on the boardwalk, but was stalled on the project when Mike Rose, then CEO of Holiday Inn and Harrah's approached him to manage construction of a Holiday Inn Casino-Hotel. It opened in May 1984 and two years later Trump bought out Holiday Inn's shares in the property and renamed it the Trump Plaza Hotel and Casino.[4]

In 1985, Trump purchased the nearly-complete Atlantic City Hilton hotel and casino property at the Atlantic marina from Hilton Hotels for $325 million. The hotel chain sold the property after its application for a gaming license was turned down by the CCC.[5] Trump originally opened the property as Trump's Castle Hotel Casino, and later renamed it the Trump Marina.

In 1988, Trump purchased the unfinished Taj Mahal property from Resorts International for $230 million after negotiations with Merv Griffin in which the two men divided the assets of the failing company.[6] The casino, at the time the largest in Atlantic City, would eventually cost almost $1 billion by the time it opened in 1990. Trump completed the project using junk bonds, a decision that hurt the company afterward as the gaming industry struggled in a recession and interest rates became unmanageable.[7]

In 1995, Trump established Trump Hotels and Casino Resorts (THCR) as a publicly traded company, granting it ownership of the Trump Plaza and the under-development Trump Casino in Gary, Indiana.[8] The following year, THCR bought the Trump Taj Mahal at a valuation of $890 million,[9][10] and bought the Trump Castle from Trump for $486 million (including $355 million in assumed debt).[11]

In 1996, the company opened Trump World's Fair, a casino adjunct to the Trump Plaza.[12] The World's Fair was closed in 1999, with plans to replace it with a larger resort.[13]

In 1999, THCR agreed to purchase the Flamingo Hilton Casino Kansas City for $15 million,[14] but the deal fell through when Missouri gaming regulators did not approve the company's gaming license by a contractual deadline.[15]

THCR entered a management agreement in 2000 to operate the Spotlight 29 Casino, an Indian casino in Coachella, California.[16]

Financial troubles

Trump Entertainment Resorts and its predecessors have filed for Chapter 11 bankruptcy protection four times, in 1991, following construction of the $1-billion Trump Taj Mahal, and in 2004, 2009 and 2014.

In 2004, Trump Hotels & Casino Resorts explored various options for restructuring its debt, amid speculation that it might file for bankruptcy. A possible arrangement with Credit Suisse First Boston was not completed because the bondholders rejected it.[17]

On October 21, 2004, the company announced a preliminary agreement with its investors. Trump, who has been the majority owner, would reduce his stock ownership from 56 percent to 27 percent. Bondholders would surrender some of their debt in exchange for stock. On October 27, the company announced that Morgan Stanley would be the joint lead arranger for a financing of $500 million financing as part of the restructuring plan. On November 21, the company filed for bankruptcy. Trump said the filing was "really just a technical thing" as the best way to implement the restructuring plan.[18] The plan was submitted to the Bankruptcy Court on December 16, 2004.

After the 2004 bankruptcy filing, Trump Hotels & Casino Resorts changed its name to Trump Entertainment Resorts (TER).

In 2005, the company's involvement in the Spotlight 29 Casino ended, as the tribe bought out the casino management agreement for $6 million.[19] Later that year, TER sold its Indiana casino to The Majestic Star Casino, LLC for $253 million.[20][21] The company had also been awarded a license to build a second casino in Orange County, Indiana, but dropped this plan, due in part to the state's concerns about the company's viability.[22]

On May 18, 2007, the company announced that it was in the preliminary stages of negotiating a buyout with several public and private firms. On July 2, 2007 Trump Entertainment Resorts announced that they could not make a deal with any company that they were in talks with and decided to take itself off the market. The company planned to lay off employees in order to cut costs.[23]

2009 bankruptcy and restructuring

The casino group filed for bankruptcy again in February 2009 [24] owing $1.2 billion. Two sets of debt holders eventually proposed reorganization plans for the group in U.S. bankruptcy court.

Trump initially made an agreement with banker/high-stakes poker player Andrew Beal, owner of Beal Bank, which held $500 million in the group's debt, to take over the resorts. However, citing concerns about the bank's experience with gaming, he dropped them in favor of the hedge fund Avenue Capital Management, a plan favored by other bond-holders. Beal then partnered with investor, Carl Icahn, who had worked on restructuring another Atlantic City casino, the Tropicana.[25] In court, Trump argued that he would fight the Icahn/Beal team if they sought to use his name and likeness on the group's properties.[26] Instead he signed an agreement with Avenue Capital in which he would receive 5% stock in the reorganized company and another 5% in exchange for the use of his name and likeness in perpetuity.

Judith H. Wizmur, Chief Judge of the United States Bankruptcy Court for the District of New Jersey, eventually sided with the Trump/Avenue partnership, favored by bond holders who believed that Trump's brand would result in a stronger company after reorganization.[27]

In 2011, TER sold the Trump Marina to Landry's Restaurants, which also operates the Golden Nugget in Las Vegas.[28]

Post-bankruptcy

In February 2013, the company agreed to sell the Trump Plaza for $20 million to the Meruelo Group, a California-based company whose holdings include the Grand Sierra Resort in Reno. The proceeds would be used to pay down the company's debt to a level of $270 million. CEO Robert Griffin said TER would consider also selling the Trump Taj Mahal for the right price.[29] However, in 2013, Carl Icahn, who held the mortgage on the Trump Casinos, would reject the sale of the Trump Plaza. [30]

In early August 2014, Donald Trump filed a lawsuit demanding removal of his name from the company's two casinos, because they had allegedly been allowed to fall into disrepair, in breach of the licensing agreement for Trump's name.[31]

2014 bankruptcy

Trump Entertainment Resorts filed again for bankruptcy in September 2014.[32]

Former Properties

Trump Entertainment Resorts's only current property is the Trump Taj Mahal in Atlantic City, New Jersey.

The company's former properties include:

References

  1. ↑ http://phx.corporate-ir.net/phoenix.zhtml?c=71730&p=irol-govBio&ID=168997
  2. ↑ Trump Quits Trump Entertainment as Debt Payment Deadline Looms
  3. ↑ Trump, Donald and Schwartz, Tony, Trump: the art of the deal, Random House Digital, Inc., 2004, page 204
  4. ↑ Blair, Gwenda, The Trumps: Three Generations That Built an Empire, Simon and Schuster, 2001, page 345
  5. ↑ Delugach, Al, Hilton Negotiating to Sell Its Atlantic City Hotel-Casino to Trump, L.A. Times, April 19, 1985
  6. ↑ Easton, Nina, Merv Griffin's Outrageous Fortune..., L.A. Times, July 24, 1988
  7. ↑ Clark, Kenneth, Trump Taj Mahal Casino-hotel Opens With A Bang, Chicago Tribune, April 6, 1990
  8. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  13. ↑ Lua error in package.lua at line 80: module 'strict' not found.  – via HighBeam (subscription required)
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  16. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  17. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  18. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  19. ↑ Lua error in package.lua at line 80: module 'strict' not found.  – via HighBeam (subscription required)
  20. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  21. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  22. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  23. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  24. ↑ Love, Zach, Bankruptcy Roundup: Trump Dumps Casinos, Fortunoff Gets Sued, and Peanut Corp. Goes Under, Law.Com, Feb. 17, 2009
  25. ↑ Grant, Peter, Icahn Leaps Into Trump Casino Battle, Wall Street Journal, Dec. 14, 2009
  26. ↑ Church, Steven, Trump Argues Name Can’t Be Used By Icahn for Casinos (Update4) , Bloomberg, February 23, 2010
  27. ↑ Gallagher, Mary Pat, Trump-Icahn Bankruptcy Pact OK'd but Bondholders' Legal Fees Unresolved, Law.Com, Oct. 8, 2010
  28. ↑ Trump Entertainment to sell Atlantic City Marina Hotel for $38M, Star-Ledger, Feb. 14, 2011
  29. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  30. ↑ http://www.pressofatlanticcity.com/news/press/atlantic_city/carl-icahn-won-t-approve-sale-of-trump-plaza-for/article_6bf05244-abb4-11e2-97a7-0019bb2963f4.html
  31. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  32. ↑ Lua error in package.lua at line 80: module 'strict' not found.

External links


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