by editorial office, ch

Trump Taj Mahal Atlantic City (Atlantic City/USA, January 22, 2009) – A well-known VIP could soon fall victim to the financial and economic crisis: Donald Trump’s casino group in Atlantic City (New Jersey) is facing insolvency. Declining revenues and a missed loan repayment have pushed the hotel and casino empire that comprises the Trump Taj Mahal, the Trump Plaza and the Trump Marina to the edge of illiquidity. The decision will be made today (January 22).

Creditors have called in a loan of US$53.1 million which expired on December 1 of last year. The liabilities of Trump Entertainment Resorts Inc. amount to a total of US$1.25 billion. According to recent reports, the deadline has now been extended to February 4. In November, a standstill agreement was arranged with around 70 percent of creditors. The company considers resorting to the insolvency protection paragraph “Chapter 11”, should it not be able to renew the agreement. This would be the fourth time since 1991 for Trump to utilize the “Chapter 11” procedure.

Trump is struggling with rapidly declining revenues in the gambling paradise of Atlantic City. The casinos’ operating expenses cannot be reduced as fast as revenues are dropping. The annual income of 2008 decreased by 5.1 percent (compared to the previous year) at flagship Trump Taj Mahal, by 6.1 percent at Trump Plaza and by as much as 15.8 percent at Trump Marina. As the weakest property, the Trump Marina is to be sold off now. The prospective buyer (Coastal Development LLC, New York) wants to pay US$270 million. But the transaction may be called off, since funding has become much more difficult.

Donald Trump is the main share holder and chairman of the casino chain, but is no longer active in its management. His biggest ace is the outstanding location of the hotel realty.