Rumors - Trump Entertainment Resorts will File for Bankruptcy

London, United Kingdom (PressExposure) February 18, 2009 -- It’s not a problem understanding how casino company stocks have been badly hurt from the financial crisis just by last week’s sale of an executive of Trump Entertainment Resorts, the company founded by real estate mogul Donald Trump. Trump has resigned from his name-bearing Enterprise.

2,260 shares of company stock were sold for 18 cents a share by the company’s senior VP of development Eric Hausler. He received an embarrassing $406. Even in a recession, that's Trump change.

Due to overwhelming debt, the recession which is taking a toll on gamblers as well, and a cruel competitive market for gamblers from NY and Pennsylvania slots parlors, the company’s stock has plunged head first. Trump Entertainment's probability of default rating was cut this week by Moody’s Investors Service quoting the company’s decision to delay a scheduled interest payment on some notes.

The company is late on a $53.1 million bond interest payment which was due Dec. 1st and also late after the 30-day grace period which was given. During that period, the casino operator was counting on closing a deal to restructure $1.25 billion in bond debt.

Though they have reached a further extension to Jan 21st, there is no guarantee they will be able to make payment on that date. The only way out of this debt is to file a third bankruptcy for Trump Entertainment.

Donald Trump was quoted telling The Associated Press in January “Every company down there (in Atlantic City) is in deep trouble,” "Show me one that's not."

This week there has been rumors that the company will be filing for bankruptcy.

Donald has been quoted “I have nothing to do with it, I’m not in it” “I’m not on the board”

His daughter Ivanka has also quit the board.

Atlantic City’s 11 casinos were down almost 7% in revenues for 2008 till November. This Friday yearly figures will be released.

Trump would not say whether he thought the company would be able to avoid a prepackaged bankruptcy filing if talks with bond holders failed to produce a deal.

"I'm not involved in the management of the company," said Trump, who is chairman of the board and its largest single stockholder. Part of the previous bankruptcy reorganization involved Trump relinquishing operational control of the company.

"I'm just an investor," he said.

The company's CEO Mark Juliano, said he hopes a deal can be struck with bond holders by the Jan. 21 deadline to restructure the company's finances and avoid a bankruptcy filing.

Moody's rating outlook for the company is negative.

"The negative outlook continues to recognize that while Trump remains in discussions with its lenders and certain note holders regarding a possible restructuring of its capital structure, there is no assurance that any agreement with respect to any restructuring will be reached," Moody's said in a statement.

Trump Entertainment has traded as high as $4.80 per share within the past year. It had closed at 32 cents a share on Tuesday afternoon, sinking 6 cents from its morning opening.

Juliano said Hausler and other company officials have set up automatic stock sales at predetermined dates to help with tax liabilities, regardless of the current stock price.

It is most certain that other casino operators have also seen their share prices take a nose dive.

Trump Entertainment hopes to complete a deal to sell Trump Marina Hotel Casino to Richard Fields, a former protégé of Donald Trump, in the next 6 months for $270 million. This is the price after original asking price was $316 million in order for the deal to keep afloat.

Besides Trump Marina, the company owns the Trump Taj Mahal Casino Resort, and Trump Plaza Hotel and Casino which have all experienced near bankruptcy in the past.

Trump is not thrilled the company may continue to use his name. Sharon-Lee Lyons United Kingdom Casinos

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Press Release Submitted On: February 18, 2009 at 1:44 am
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