Trump Entertainment Resorts Inc. will soon emerge from bankruptcy with less debt, a commitment to sell one casino and plans for longer-term projects that could include the first gaming floor built directly over the ocean, said the company’s chief executive. After a 14-month bankruptcy battle, the company has started to under new ownership by a group of corporate bondholders headed by Marc Lasry and his Avenue Capital Group hedge fund. They are paying $225 million for the three Trump casinos and plan to slash the company’s debt from $1.7 billion to between $325 million and $335 million. Unlike the company’s two previous bankruptcies, in the early 1990s and in 2005, this time the casinos will emerge from Chapter 11 with far less debt, Trump Entertainment CEO Mark Juliano emphasized. A federal bankruptcy judge picked the bondholders over investor Carl Icahn in a takeover fight for Trump Entertainment.
The bondholders were backed by Donald Trump, who will receive as much as a 10 percent stake in the reorganized company. The company’s post-bankruptcy turnaround strategy includes selling the underperforming Trump Marina Hotel Casino and bringing in an investment partner to help expand Trump Plaza Hotel and Casino. Improvements are also planned at Trump Taj Mahal Casino Resort. A joint venture partner for Trump Plaza would provide the financing for a new hotel tower or other upgrades. The casino has languished because the company has lacked the money for an extensive makeover. Juliano said that the sale of Trump Plaza shouldn’t happen because the depressed real estate market would prevent the company from getting an attractive price, despite the casino’s prime location. It is expected to see a lot more of Ivanka Trump in the coming months, as she becomes one of the main public faces of Trump Entertainment. Already familiar from Trump Entertainment billboards in and around Atlantic City dating from the days before she and her father quit its board amid the bankruptcy filing, the executive vice president of development & acquisitions for the Trump Organization will play a larger role in marketing Trump Entertainment as well.
Trump Marina, has suffered from its location in the Marina District, in the shadow of powerhouse competitors Borgata Hotel Casino & Spa and Harrah’s Resort. Trump Entertainment hopes to unload the Marina as soon as possible. One potential buyer is Richard T. Fields. Trump Taj Mahal will continue to be the company’s flagship operation. Juliano said upgrades are planned for the Taj Mahal’s spa and high-end slots area. In the longer term, the company will consider redeveloping the Steel Pier amusement park, directly across the Boardwalk, for a casino and hotel project. Previous plans to redevelop the Trump Entertainment-owned Steel Pier into a hotel or a luxury condominium project failed because of funding shortages. New ownership, is supposed to be strengthening Trump’s finances and also help the company make upgrades to attract more convention business and wealthier overnight customers, one analyst said. Morowitz also said the company will have more money just by keeping the Trump name. He noted that Trump Entertainment would have had to spend millions of dollars for the casinos if a deal was not struck with bondholders to retain the Trump moniker. The need to reinvent them to appeal to markets that are currently rejecting them and Atlantic City is urgent, said Cory Morowitz, a New Jersey casino analyst.