Trump Entertainment Resorts filed for bankruptcy today and threatened to shut down the Taj Mahal Casino Resort, which would make it the fifth Atlantic City casino to close this year.
The company owns Trump Plaza, which is closing in a week, and the Taj Mahal, which has been experiencing cash-flow problems and had been trying to stave off a default with its lenders. The company said the Taj Mahal could close Novemebr 13 if it does not win salary concessions from union workers.
It is the fourth such filing for the struggling casino company or its corporate predecessors.
The company filed in US Bankruptcy Court in Wilmington, Delaware, saying it has liabilities of between USD 100 million and USD 500 million, and assets of no more than USD 50,000. It missed its quarterly tax payment due last month, and says it does not have the cash to make an interest payment to lenders due at the end of the month.
It also says both its Internet gambling partners have taken steps to end their contracts with Trump Entertainment.
It said cost-cutting negotiations with the main casino workers' union have stalled and the company is preparing notices warning employees the Taj Mahal may close.
Donald Trump owns a 9 per cent stake in the firm, but neither controls it nor has any involvement in it. He is suing the company to remove his name from the properties, which he says have fallen into disrepair and do not meet agreed-upon standards of quality and luxury.
If the company makes good on its threat to close the Taj Mahal, it would further rock an already shell-shocked casino market in what just a few years ago was the nation's second-largest gambling market after Nevada. Now, New Jersey has fallen behind Pennsylvania.
Three other Atlantic City casinos closed this year, as the industry struggles with competition in nearby states. Atlantic City began the year with 12 casinos, but could end it with seven. So far this year, the Atlantic Club, Showboat and Revel have gone out of business, and Trump Plaza closes next Tuesday.
Trump Entertainment has struggled since the day it emerged from its last bankruptcy in 2010, having filed the year before. It came out of bankruptcy with USD 350 million in debt, and currently has more than USD 285 million in debt.
