Trump Entertainment Resorts files bankruptcy

WILMINGTON, Del. — Trump Entertainment Resorts, the company founded by Donald Trump, has filed for bankruptcy, putting a fifth Atlantic City casino in danger of closing if it fails to negotiate concessions with union members.

The company, which owns two properties in the struggling New Jersey resort town, listed assets and liabilities of as much as $500 million each in a Chapter 11 filing Tuesday in Wilmington, Del. Its Trump Plaza is set to cease operations on Sept. 16. The Trump Taj Mahal may also shut in November, the company said. It’s the company’s third bankruptcy.

Three other casinos have closed in the city this year, including Caesars Entertainment’s Showboat and the bankrupt Revel Casino Hotel last week. If the Taj Mahal shutters along with the Plaza, another 2,800 employees will be put out of work in a city already losing 5,200 casino jobs this month.

New Jersey Gov. Chris Christie and local leaders held a summit on Monday to discuss Atlantic City’s future after an expansion of gambling in neighboring states ate into what was once the only legal market on the East Coast.

Trump Entertainment sought concessions from the local union of New York-based Unite Here, which represents more than a third of the company’s 4,100 workers. Negotiations have so far failed to yield an agreement. The company said in court papers that without cost reductions, it expects that “the Taj Mahal will close on or shortly after” Nov. 13.

The union contract costs the company about $15 million a year in health, welfare and other benefits and $5 million in pension payments, and together with property taxes results in an “unsustainable cost structure,” according to court documents.

Also, competition from neighboring states “has resulted in significant oversupply in the Atlantic City casino market,” according to the company. The Taj Mahal’s recent operational results suggest that any benefit from competitors’ closings “may be muted, non-existent or even negative as a result of the closures.”

Chris Filiciello, a spokesman for Atlantic City Mayor Don Guardian didn’t immediately respond to an emailed request for comment on Tuesday’s filing. Christie’s spokesmen, Kevin Roberts and Michael Drewniak, also didn’t immediately reply to emails. The governor is to speak to reporters Tuesday at an appearance in Camden, N.J.

Christie pushed for Internet gambling in 2013 to give a boost to Atlantic City’s casinos. So far, Trump’s online operations have “fallen short” of expectations, the company said in its filing.

The company’s earnings have declined since its last bankruptcy, resulting in a $5.1 million loss last year, according to court papers. Gaming revenue fell 16 percent last year, and has decreased more than 18 percent for the first six months of this year.

“While nearly all Atlantic City casinos reported a decline in net revenue across the board,” an average annual decline of 4.7 percent over the past two years, the Trump casinos “have suffered greater revenue declines than their peers” with the Plaza and the Taj Mahal plummeting 24.7 percent and 12.7 percent average over the same period, the company said.

“The continued decline of casino gaming in AC, not just the latest casualty, makes the case for my proposal to re-invest billions in AC to reinvent it as a tourist destination with casinos, not just a casino destination, by bringing back the revenues lost to surrounding states with two casinos in North Jersey,” State Sen. Raymond Lesniak, D, said in a statement.

Lesniak is sponsoring legislation seeking voter approval to build casinos beyond Atlantic City.

The Taj Mahal’s net revenue for the first six months of the year was $80.5 million, court papers show. The Plaza’s net revenue for the first half of the year was about $28.1 million.

Trump, the 68-year-old real-estate tycoon and reality-TV star, began investing in Atlantic City in the early 1980s. His three casinos went through bankruptcy in the early 1990s, after the $1 billion Taj Mahal opened in a recession. This will be the third time the entire company was put into bankruptcy — it sought court protection in 2004 and again in 2009, when Trump gave up the chairmanship.

“Mr. Trump has absolutely nothing to do with Trump Entertainment Resorts Inc. and is currently in a lawsuit seeking to have his name taken off the buildings,” Michael Cohen, his special counsel, said in a statement.

Funds managed by billionaire Carl Icahn are the casino owner’s biggest creditor, owed about $285.6 million in principal on secured debt plus about $6.6 million in unpaid interest, according to court documents. Icahn lost an attempt to acquire the casinos in the last bankruptcy.

Trump Entertainment has about $38 million in annual debt service payments.