\nSept. 9 (Bloomberg) \u2014 Trump Entertainment Resorts Inc., the company founded by Donald Trump, filed for bankruptcy, putting a fifth Atlantic City casino in danger of closing if it fails to negotiate concessions with union members.<\/p>\n
\tThe 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 today in Wilmington, Delaware. Its Trump Plaza is set to cease operations on Sept. 16. The Trump Taj Mahal may also shut in November, the company said. It\u2019s the company\u2019s third bankruptcy.<\/p>\n
\tThree other casinos have closed in the city this year, including Caesars Entertainment Corp.\u2019s 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.<\/p>\n
\tNew Jersey Governor Chris Christie and local leaders held a summit yesterday to discuss Atlantic City\u2019s future after an expansion of gambling in neighboring states ate into what was once the only legal market on the East Coast.<\/p>\n
\tTrump Entertainment sought concessions from the local union of New York-based Unite Here, which represents more than a third of the company\u2019s 4,100 workers. Negotiations have so far failed to yield an agreement. The company said in court papers that without the cost reductions, it expects that \u201cthe Taj Mahal will close on or shortly after\u201d Nov. 13.<\/p>\n
\tContract Costs<\/p>\n
\tThe 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 \u201cunsustainable cost structure,\u201d according to court documents.<\/p>\n
\tAlso, competition from neighboring states \u201chas resulted in significant oversupply in the Atlantic City casino market,\u201d according to the company. The Taj Mahal\u2019s recent operational results suggest that any benefit from competitors\u2019 closings \u201cmay be muted, non-existent or even negative as a result of the closures.\u201d<\/p>\n
\tChris Filiciello, a spokesman for Atlantic City Mayor Don Guardian, didn\u2019t immediately respond to an e-mailed request for comment on today\u2019s filing. Christie\u2019s spokesmen, Kevin Roberts and Michael Drewniak, also didn\u2019t immediately reply to e-mails. The governor is to speak to reporters today at an appearance in Camden.<\/p>\n
\t\u2018Fallen Short\u2019<\/p>\n
\tChristie, a 52 year-old Republican, pushed for Internet gambling in 2013 to give a boost to Atlantic City\u2019s casinos. So far, Trump\u2019s online operations have \u201cfallen short\u201d of expectations, the company said in its filing.<\/p>\n
\tThe company\u2019s 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.<\/p>\n
\t\u201cWhile nearly all Atlantic City casinos reported a decline in net revenue across the board,\u201d an average annual decline of 4.7 percent over the past two years, the Trump casinos \u201chave suffered greater revenue declines than their peers\u201d with the Plaza and the Taj Mahal plummeting 24.7 percent and 12.7 percent average over the same period, the company said.<\/p>\n
\t\u2018Reinvent It\u2019<\/p>\n
\t\u201cThe 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,\u201d State Senator Raymond Lesniak, a Democrat, said in a statement.<\/p>\n
\tLesniak is sponsoring legislation seeking voter approval to build casinos beyond Atlantic City.<\/p>\n
\tThe Taj Mahal\u2019s net revenue for the first six months of the year was $80.5 million, court papers show. The Plaza\u2019s net revenue for the first half of the year was about $28.1 million.<\/p>\n
\tTrump, 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 \u2014 it sought court protection in 2004 and again in 2009, when Trump gave up the chairmanship.<\/p>\n
\t\u201cMr. 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,\u201d Michael Cohen, his special counsel, said in a statement.<\/p>\n
\tFunds managed by billionaire Carl Icahn are the casino owner\u2019s 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.<\/p>\n
\tTrump Entertainment has about $38 million in annual debt service payments.<\/p>\n
\tThe case is In re Trump Entertainment Resorts Inc., 14-12103, U.S. Bankruptcy Court, District of Delaware (Wilmington).<\/p>\n
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