Trump to reread Chapter 11
Posted
Feb 17 2009, 12:57 PM
by
Minyanville
Rating:
The Donald has filed for bankruptcy protection -- again. Relax, it has nothing to do with an arrest by the fashion police for that infamous comb-over.
Trump Entertainment Resorts (TRMP) -- owner of three casinos in Atlantic City, N.J. -- is feeling the sting of the recession and increased competition from slot machines in nearby states. Trump, 62, a real-estate mogul and star of the TV show The Apprentice, won't be jangling the tin cup in Times Square any time soon.
Trump Entertainment has been through bankruptcy twice before, and has been profitable in only three quarters since emerging from Chapter 11 reorganization in May 2005. The company missed a $53 million interest payment in early December, and the creditor's grace period ends today.
Trump apparently sought bankruptcy protection before the bondholders could file an involuntary petition. Trump resigned from the company's board on February 13 because he disagreed with the bondholders' actions, including rejection of his buyout offer.
The company's market value is about $7.3 million, down from a peak of about $842 million in August 2005.
Trump may be operating casinos on the wrong side of the continent. No one ever says, "What happens in Atlantic City stays in Atlantic City" because, well, nothing ever happens there.
Dowdy Atlantic City is perhaps best known for giving the street names to Monopoly, the popular board game that was once banned in the Soviet Union for fostering capitalist principles. Trivia buffs claim that twice as much Monopoly money is printed each year than Federal Reserve notes - but, given Uncle Sam's recent bailouts, someone is bound to ask: What's the difference?
Las Vegas gaming revenues are down, and most analysts don't see a rebound until 2010. If Las Vegas is hurting, Atlantic City must be getting clobbered.
Thanks to the recession, this is isn't a good time to be in the casino business. Las Vegas Sands (LVS) and Wynn Resorts (WYNN) have been suffering, as the usual steady stream of gamblers has dried up during the current downturn.
And so far, there's no line on the likelihood that Trump will change his 'do.
Top Stocks blogging partner Todd Harrison is founder & CEO of Minyanville.com. This post was written by Minyanville Contributor Scott Reeves.
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