Trump Entertainment Resorts, along with its affiliated debtors ("Trump Resorts" or "Debtors"), filed for bankruptcy under Chapter 11 of the Bankruptcy Code on September 9, 2014 (the "Petition Date") in the United States Bankruptcy Court for the District of Delaware.
According to Declaration of Robert Griffin, Chief Executive Officer of the Debtors in Support of Chapter 11 Petitions and First Day Motions and Applications (the "Griffin Declaration"), the Debtors "own and operate two casino hotels located in Atlantic City, New Jersey: the Trump Taj Mahal Casino Resort and the Trump Plaza Hotel and Casino." Griffin Declaration, ¶ 5. According to the Petition, the Debtors' assets are valued at $100 million to $500 million, and their debts are estimated at $100 million to $500 million. Debtors owe about $286 million to Carl Icahn-owned funds.
Events Leading to Bankruptcy
The Griffin Declaration provides a grim picture: since emerging from Trump Reports' prior bankruptcy cases in 2010, the Debtors continued to face significant challenges due to the prolonged economic downturn, increased competition from within the Atlantic City market and from neighboring states, and the lingering effects of Superstorm Sandy, all of which contributed to declining revenues. These factors, coupled with the seasonal and capital-intensive nature of the Debtors' businesses, high debt load, significant labor costs and double-digit real estate tax increases, hindered the Trump Resorts' ability to operate successfully and negatively impacted the Debtors' liquidity position.
Like much of Atlantic City, the two Trump properties have suffered from a decline in gambling revenue and falling occupancy at their hotel rooms.
Donald Trump sued Trump Entertainment last month to have his name taken off the two casinos, saying the company let the casinos fall into "an utter state of disrepair."
Trump Resorts has filed for bankruptcy twice before. It currently has about 2,800 full-time employees, and 1,800 seasonal employees.
Trump Resorts is represented by the law firm of Young Conaway. The Trump Resorts bankruptcy proceeding is before the Honorable Kevin Gross of the Delaware Bankruptcy Court, proceeding under case no. 14-12103. The Debtors' first day hearing was held today, September 10th at which time various first day orders were entered. The next omnibus hearing is scheduled for October 6, 2014 at 10:00 a.m.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.