Taj Mahal in Atlantic City on financial brink

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The Trump Taj Mahal Casino Resort in Atlantic City reported money shortages and a need for loans that create an uncertain future. (William Thomas Cain/Getty Images)

Atlantic City's Trump Taj Mahal warned in a recent financial filing that it was in danger of running out of money to pay its bills and make debt payments.

Trump Taj Mahal Associates L.L.C., the entity that owns the casino - the world's biggest and most lucrative casino when it opened in 1990 - said it needed to borrow more money or restructure its business.

The casino could not guarantee it would be successful, said the filing, which was published Aug. 22. According to New Jersey regulators, the casino employs 2,825.

The Taj, which sits on the Boardwalk next to just-closed Showboat, has the same owner as Trump Plaza, which is scheduled to close Sept. 16.

Brian Cahill, spokesman for Trump Entertainment Resorts Inc., which owns the properties, did not respond to a request for comment Thursday.

When Trump Plaza closes, the number of Atlantic City casinos will have fallen to eight from 12 in January, when the Atlantic Club closed. Revel Casino Hotel closed Tuesday.

Trump Entertainment has had a tumultuous financial history in Atlantic City, including three bankruptcy filings, the latest in 2009. After a long court struggle with investors in that case, founder Donald Trump lost control of the three casinos named after him.

Last month, Trump, who still owns 10 percent of Trump Entertainment, according to the Associated Press, sued to have his name removed from Trump Plaza and Trump Taj Mahal. The lawsuit argued that Trump Entertainment had violated an agreement to license the Trump name because the two casinos were not meeting "high standards of quality and luxury."

The third of Trump's Atlantic City casinos, Trump Marina, which opened in 1985, was sold for $37.7 million in 2011. It now operates as Golden Nugget, after a $150 million facelift by Landry's Inc. of Houston.

Trump Entertainment had no such luck with Trump Plaza, which it has tried to sell since 2011, according to its petition to the state Division of Gaming Enforcement seeking permission to close.

A deal last year to sell Trump Plaza for $20 million to Merullo Gaming Holdings L.L.C. fell through when investor Carl Icahn, who owns a mortgage on the property, refused to approve the sale.

Icahn affiliates own Tropicana Entertainment Inc., including Tropicana Casino in Atlantic City.

Other potential buyers that looked at Trump Plaza, such as Cordish Cos. of Baltimore, decided that it wasn't viable, no matter how low the price.

Trump Entertainment finally reached the same conclusion in July, when it announced the closure. Still up in the air is the fate of Trump Plaza's partner for Internet gaming in New Jersey, Beautifier.

That will leave the Taj Mahal, with its faded white exterior and dingy signs, as the final remnant of the perennially debt-laden Donald Trump empire here.

Taj Mahal's quarterly financial report said that a June 28 agreement had relaxed certain conditions of its loan, but that forbearance agreement expired Aug. 18.

The company said it was trying to extend the agreement and to expand it "to cover certain additional events of default that have occurred or are expected to occur."

Trump Entertainment owed $285.59 million under the credit agreement subject to the negotiations, the filing said.

The New York Post reported Wednesday evening, based on anonymous sources, that talks with lenders had broken down, and that a Chapter 11 bankruptcy filing could happen within days.

 


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