Trump Entertainment Resorts files for bankruptcy

Trump Entertainment Resorts trmp, based in Atlantic City, filed for Chapter 11 protection on Tuesday in U.S. Bankruptcy Court in New Jersey.

Tuesday was the company's deadline to reach a new deal with bondholders to restructure $1.25 billion in debt.

Donald Trump and his daughter Ivanka resigned from the company's board Friday night, after growing frustrated with bondholders. He said the bondholders had rejected his offer to buy the company and he would consider legal action to remove his name from its three casinos in Atlantic City.

Talks had been extended four times to try to reach a deal to give the company some financial breathing room.

The company has $1.74 billion in total debt and $2.06 billion in assets, according to the court filing.

The casino company owns three Atlantic City casinos but is in the process of selling the Trump Marina Hotel Casino. Its two other properties are the Trump Taj Mahal Casino Resort, and the Trump Plaza Hotel and Casino.

Its predecessor company, Trump Hotels & Casino Resorts, went through a 2005 restructuring. That followed an earlier bankruptcy in the 1990s.

On Wednesday, the state Casino Control Commission was to consider a request by Column Financial to either foreclose on Resorts, or have the owners surrender title to it without having to go through foreclosure.

Resorts International Hotel and its corporate affiliates say Column does not have a casino license, and therefore can't be permitted to take over the casino-hotel.

"In the interest of its efforts to maintain the current operations at Resorts, including the payment of taxes, winning wagers and compensation due employees and vendors, (Resorts) believed it would be prudent to stop paying monthly interest in connection with the loan," the casinos owners wrote in a filing with the casino commission dated Feb. 5.

All of Atlantic City's casinos are struggling from the combined effects of the economic meltdown, and stiff competition from slots parlors in Pennsylvania and New York. But Resorts, which became the first casino outside Las Vegas in May 1978, is among the weakest here.

A smaller casino with a decidedly older clientele that tends to spend — and lose — less money, Resorts has been left behind in the race to compete with newer, hipper gambling halls like the Borgata Hotel Casino & Spa, and Harrah's Resort Atlantic City.

It won about $466,000 a day from gamblers last month, compared with $1.8 million a day for the Borgata. Resorts' revenue fell more than 25% last month compared to January 2008, and plunged more than 16% for all 2008.

Last month, Column Financial, a commercial mortgage subsidiary of Credit Suisse, served notice on Resorts that it intends to foreclose on the casino, which hasn't paid since October on a loan backed by a $360 million mortgage.

The state Division of Gaming Enforcement issued a report on Jan. 27 that raised no objection to the lender being permitted to foreclose on or take control of Resorts.

But Resorts said state casino law prohibits Column or other related parties from doing so before they have a casino license or are determined to be qualified to hold one.

It did agree to the division's request that it create a special fund with at least $15 million at all times to cover winning bet payouts, payroll and other expenses while regulators determine the fate of the casino.

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