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Atlantic City’s Trump Taj Mahal heads toward Chapter 11
Casino reportedly unable to find out-of-court solution with creditors
Atlantic City’s 24-year-old Trump Taj Mahal may soon be headed for bankruptcy.
The Boardwalk casino recently broke some of its loan covenants and could be forced to file for a Chapter 11 reorganization in a few days if a deal is not reached with its creditors, the New York Post reported.
Hopes reportedly floated that Carl Icahn, who owns much of the Trump Entertainment debt, would agree to convert that debt into equity in an effort to keep the hotel out of bankruptcy. But such a rescue measure now appears unlikely, according to the Post.
The Taj, the second-largest casino in Atlantic city with nearly 150,000 square feet of gambling space, reported a slight operating loss in the first six months of the year, Imperial Capital analyst Gregg Klein told the Post. Should the 2,248-room property fold, it would join its beleaguered neighbor the Trump Plaza, which is likewise folding amid financial difficulties.
Donald Trump filed a lawsuit to remove his name from both the Taj and the Trump Plaza earlier this year. The suit accused Trump Entertainment Resorts, a corporate entity formerly affiliated with the developer, of Allowing The Trump Taj Mahal And The Trump Plaza to slip into “an utter state of disrepair,” which Trump said is tarnishing his brand.
Trump Entertainment Resorts filed for bankruptcy four times between 1991 and 2009. After the first filing, the company went public and Trump began reducing his stake in it, from 36.6 percent in 1991 to just 5 percent as of last year. [NYP] — Julie Strickland