Trump Entertainment Resorts, Inc. was a gaming and hospitality company that owned and operated the now shuttered Trump Taj Mahal hotel and casino, as well as the now shuttered Trump Plaza Hotel and Casino and the Trump Marina located in Atlantic City, New Jersey, United States. Formerly known as Trump Hotels & Casino Resorts, it was founded in 1995 by Donald Trump, now 45th President of the United States, who has not had any formal role in the company since 2011, if not earlier. The company filed for bankruptcy in 2004, 2009 and 2014. It has been a subsidiary of Icahn Enterprises since 2016.
Video Trump Entertainment Resorts
History
Donald Trump began purchasing properties along the Atlantic City boardwalk in the early 1980s and received a casino license from the New Jersey Casino Control Commission (CCC) on March 15, 1982. He had planned to build his own casino on the boardwalk, but was stalled on the project when Mike Rose, then CEO of Holiday Inn and Harrah's approached him to manage construction of a Holiday Inn Casino-Hotel. It opened in May 1984 and two years later Trump bought out Holiday Inn's shares in the property and renamed it the Trump Plaza Hotel and Casino.
In 1985, Trump purchased the nearly-complete Atlantic City Hilton hotel and casino property at the Atlantic marina from Hilton Hotels for $325 million. The hotel chain sold the property after its application for a gaming license was turned down by the CCC. Trump originally opened the property as Trump's Castle Hotel Casino, and later renamed it the Trump Marina.
In 1988, Trump purchased the unfinished Taj Mahal property from Resorts International for $230 million after negotiations with Merv Griffin in which the two men divided the assets of the failing company. The casino, at the time the largest in Atlantic City, would eventually cost almost $1 billion by the time it opened in 1990. Trump completed the project using junk bonds, a decision that hurt the company afterward as the gaming industry struggled in a recession and interest rates became unmanageable.
The company was shaken by the deaths of three key executives in an April 10, 1989 helicopter crash in northern New Jersey while they were returning from a New York press conference promoting an upcoming Atlantic City boxing event. The men were Steven F. Hyde, the CEO of Trump's casino operations, Mark Grossinger Etess, the president and chief operating officer of the Taj Mahal, and Trump Plaza executive vice president Jonathan Benanav.
In 1995, Trump established Trump Hotels and Casino Resorts (THCR) as a publicly traded company, granting it ownership of the Trump Plaza and the under-development Trump Casino in Gary, Indiana. The following year, THCR bought the Trump Taj Mahal at a valuation of $890 million, and bought the Trump Castle from Trump for $486 million (including $355 million in assumed debt).
In 1996, the company opened Trump World's Fair, a casino adjunct to the Trump Plaza. The World's Fair was closed in 1999, with plans to replace it with a larger resort.
In 1997, THCR was one of eleven applicants for three casino licenses available in Detroit, with a $542-million proposal for the Trump Motor City Hotel Casino, in partnership with Mel Farr. The bid was ultimately dropped from consideration because of Mayor Dennis Archer's doubts about the company's financial condition.
In 1998, THCR business consultants spent at least $68,000 on a trip to Cuba in violation to the United States embargo against Cuba. According to a report by Newsweek, the consulting firm Seven Arrows Investment and Development instructed THCR on how to evade the embargo by linking the money to a charitable effort.
In 1999, THCR agreed to purchase the Flamingo Hilton Casino Kansas City for $15 million, but the deal fell through when Missouri gaming regulators did not approve the company's gaming license by a contractual deadline.
THCR entered a management agreement in 2000 to operate the Spotlight 29 Casino, an Indian casino in Coachella, California.
Financial troubles
Trump Entertainment Resorts and its predecessors have filed for Chapter 11 bankruptcy protection four times, in 1991, following construction of the $1-billion Trump Taj Mahal, and in 2004, 2009 and 2014.
In 2004, Trump Hotels & Casino Resorts explored various options for restructuring its debt, amid speculation that it might file for bankruptcy. A possible arrangement with Credit Suisse First Boston was not completed because the bondholders rejected it.
On October 21, 2004, the company announced a preliminary agreement with its investors. Trump, who had been the majority owner, would reduce his stock ownership from 56 to 27 percent. Bondholders would surrender some of their debt in exchange for stock. On October 27, the company announced that Morgan Stanley would be the joint lead arranger for a $500 million financing as part of the restructuring plan. On November 21, the company filed for bankruptcy. Trump said the filing was "really just a technical thing" as the best way to implement the restructuring plan. The plan was submitted to the Bankruptcy Court on December 16, 2004.
After the 2004 bankruptcy, Trump Hotels & Casino Resorts changed its name to Trump Entertainment Resorts (TER).
In 2005, the company's involvement in the Spotlight 29 Casino ended, as the tribe bought out the casino management agreement for $6 million. Later that year, TER sold its Indiana casino to The Majestic Star Casino, LLC for $253 million. The company had also been awarded a license to build a second casino in Orange County, Indiana, but dropped this plan, due in part to the state's concerns about the company's viability.
In 2007, the company attempted to negotiate a buyout with several public and private firms, but on July 2, it announced that it could not reach a deal, and would take itself off the market. The company planned to lay off employees in order to cut costs.
2009 bankruptcy and restructuring
The casino group filed for bankruptcy again in February 2009, owing $1.2 billion. Two sets of debt holders eventually proposed reorganization plans for the group in U.S. bankruptcy court.
Trump initially made an agreement with banker and poker player Andrew Beal, owner of Beal Bank, which held $500 million in the group's debt, to take over the resorts. However, citing concerns about the bank's lack of gaming experience, he dropped them in favor of hedge fund Avenue Capital Management, a plan favored by other bondholders. Beal then partnered with investor, Carl Icahn, who had worked on restructuring another Atlantic City casino, the Tropicana. In court, Trump argued that he would fight the Icahn/Beal team if they sought to use his name and likeness on the group's properties. Instead he signed an agreement with Avenue Capital in which he would receive 5% stock in the reorganized company and another 5% in exchange for the use of his name and likeness in perpetuity.
The bankruptcy court eventually sided with the Trump/Avenue partnership, favored by bond holders who believed that Trump's brand would result in a stronger company after reorganization.
In 2011, TER sold the Trump Marina to Landry's Restaurants, which also operates the Golden Nugget in Las Vegas.
Post-bankruptcy
In February 2013, the company agreed to sell the Trump Plaza for $20 million to the Meruelo Group, a California-based company whose holdings include the Grand Sierra Resort in Reno. The proceeds would be used to pay down the company's debt to a level of $270 million. CEO Robert Griffin said TER would consider also selling the Trump Taj Mahal for the right price. However, Carl Icahn, who held the mortgage on the Trump casinos, would reject the sale of the Trump Plaza.
In early August 2014, Donald Trump filed a lawsuit demanding removal of his name from the company's two casinos, because they had allegedly been allowed to fall into disrepair, in breach of the licensing agreement for Trump's name.
2014 bankruptcy
In September 2014, Trump Entertainment Resorts filed again for bankruptcy, and closed the Trump Plaza. On a motion made by union UNITE HERE Local 54, relating to the bankruptcy action, the United States Court of Appeals for the Third Circuit ruled in Trump Entertainment's favor on January 15, 2016 and held that Trump Entertainment could reject the continuing terms and conditions of a collective bargaining agreement with the union, an agreement that had already expired by its terms. This case was significant as it was a matter of First impression among the courts of appeal and could significantly alter the balance of power between debtor-employers and their unions.
The company exited bankruptcy in February 2016 and became a subsidiary of Icahn Enterprises.
Maps Trump Entertainment Resorts
2016 and closure of Taj Mahal
On October 10, 2016 the Trump Taj Mahal closed for the final time. Trump Entertainment will remain operating to deal with the transfer of some points on the Trump One card account. The Trump Taj website is empty.
Former properties
The company's former properties include:
- Harrah's at Trump Plaza in Atlantic City, New Jersey (formerly a 50/50 partnership with Harrah's) now wholly owned and renamed as the Trump Plaza, which was closed on September 16, 2014.
- Trump 29 Casino in Coachella, California (formerly a 50/50 partnership with the Twenty-Nine Palms Band of Mission Indians of California) 2006 Trump officially got out. Now Spotlight 29 Casino.
- Trump Casino in Gary, Indiana now the Majestic Star II.
- Trump World's Fair at Trump Plaza in Atlantic City, New Jersey. Operated as a wing of Trump Plaza, but with its own casino license, it was closed in 1999, and demolished in 2000.
- Trump Castle (renamed Trump Marina in 1997) in Atlantic City, New Jersey, sold to Landry's, Inc. in 2011 and renamed the Golden Nugget Atlantic City
- Steel Pier, sold in 2011
- Trump Taj Mahal, a casino and hotel on the Atlantic City boardwalk. Permanently closed on October 10, 2016.
References
External links
- Trump Entertainment Resorts
Source of article : Wikipedia
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