Now even Donald Trump has fallen victim to the credit crunch. Trump Entertainment Resorts Inc., Mr Trump's casino group, filed for Chapter 11 bankruptcy protection today, court documents show. The company missed a $53.1 million bond interest payment due on December 1 as a sharp downturn in consumer spending hit casino revenues. Mr Trump himself resigned from the Board. His daughter Ivanka also resigned from the board in protest over the bankruptcy filing. 'Some time ago, I made an offer to buy the company in hopes that I might be able to reverse its fortunes,' Mr Trump, who owns 28 per cent of the company's stock, said.But the bondholders turned me down,' he addedHis daughter Ivanka also resigned from the board in protest over the bankruptcy filing.Some time ago, I made an offer to buy the company in hopes that I might be able to reverse its fortunes,' Mr Trump, who owns 28 per cent of the company's stock, said. But the bondholders turned me down,' he added. Now he can but watch as lawyers fill thier pockets up as many more companies crash.Trump Entertainment has hired the law firm of Weil Gotshal & Manges LLP as bankruptcy counsel and Lazard Ltd. as financial advisers...
The casino operator had assets of about $2.1 billion and total debts of about $1.74 billion on December 31, 2008.Shares of Trump Entertainment Resorts trade at around 23 cents, down from more than $4 a year ago.Nine affiliates of the casino operator including Trump Plaza Associates, Trump Plaza Associates, Trump Marina Associates and Trump Taj Mahal Associates simultaneously sought protection, according to the filing. If the casino operator had not filed it would have worse.
Most of the casino industry is being hammered, as consumers have cut back on casino visits and spending in the past year. Major Las Vegas casino companies like Harrah's Entertainment Inc., MGM Mirage and Las Vegas Sands Corp. have been forced to sell properties at big discounts, cut thousands of employees and stopped development. At least one operator, Station Casinos Inc., is contemplating bankruptcy protection.
But Atlantic City has been hit worse. It has been battered by competition and a fading image as new casinos have emerged and expanded in neighboring states like Pennsylvania, New York and Connecticut. Atlantic City posted the biggest drop in gambling revenue in its history in December, with an 18.7 percent decline from a year earlier. According to state regulators, the city's casinos posted a 9.4 percent decline in January.
Several Atlantic City casinos are in severe distress. The Tropicana is up for sale in bankruptcy court, and Resorts Atlantic City is facing foreclosure.There are more to come. But for Trump himself he is by no means bankrupt.
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2009 Obama is saying as we say the Recession was caused by the finance and banking execs who paid themselves large amounts of bonuses & salaries. These & their board of directors are the ones to blame to the financial collapse.
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Its wake up time America. These bailouts are not helping the American people just Companies who have reaped millions in rewards and done nothing to change their strategies over the years. None of them deserve bailouts and the US government cannot run these joints??? so the underlying question is how much of thise bail out money will be spent on themselves---- most of it so watch.
BANKRUPTCY UNDER CHAPTERS 7 & 11
Chapter 11 of the Bankruptcy Code means to "reorganize" the company and try to become profitable. Management continues to run the day-to-day business operations but business decisions must be approved by a bankruptcy court.
Under Chapter 7, the company stops all operations and goes completely out of business. A trustee is appointed to "liquidate" (sell) the company's assets and the money is used to pay off the debt, which may include debts to creditors and investors.
The investors who take the least risk are paid first. eg secured creditors take less risk because the credit that they extend is usually backed by collateral, like a mortgage or other company assets. They know they will get paid first if the company declares bankruptcy.
Bondholders have a greater potential for recovering their losses than stockholders, because bonds represent the debt of the company and the company has agreed to pay bondholders interest and to return their principal. Stockholders own the company, and take greater risk. They could make more money if the company does well, but they could lose money if the company does poorly. The owners are last in line to be repaid if the company fails. Bankruptcy laws determine the order of payment.