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Since Filing for Chapter 11 Bankruptcy In Early 2009 Trump Entertainment Resorts Inc. Continues
 Operating its Three Casinos in Atlantic City; Company Had Total Debts of
 About $1.74 billion on Dec. 31, 2008
By Suzette Parmley, The Philadelphia InquirerMcClatchy-Tribune Regional News

April 16, 2009 - Since filing for Chapter 11 bankruptcy two months ago, Trump Entertainment Resorts Inc. has kept operating its three casinos in Atlantic City.

That has included using incoming cash to pay the casinos' electric and gas bills and vendors.

U.S. Bankruptcy Judge Judith Wizmur granted three more motions yesterday for the casino operator to maintain business as usual, including entering into a new lease agreement with a helicopter company to shuttle high-end players, primarily from New York and Philadelphia.

Wizmur also approved the casino company's request to pay commissions to travel agents who book people into its three casino hotels and to consummate litigation claims under $5,000 that were settled before the company's Feb. 17 filing.

"The granting of the motions permits the continued, efficient, and normal operations of the casinos," said Charles A. Stanziale Jr., attorney for Trump Entertainment. "It's all about maintaining a customer, player, and vendor base, which will allow the company to really compete in the market that it operates in."

The casino operator -- which owns the Trump Taj Mahal, Trump Plaza, and Trump Marina casinos -- had assets of about $2.1 billion and total debts of about $1.74 billion on Dec. 31, according to a filing in U.S. Bankruptcy Court in Camden on Feb. 17.

It marked the third trip into bankruptcy for the company. Trump Entertainment emerged from its last restructuring in May 2005.

Nine affiliates of the casino operator, including Trump Plaza Associates, Trump Marina Associates, and Trump Taj Mahal Associates, simultaneously sought protection, according to the filing.

Trouble became apparent toward the end of last year, when the company missed a $53.1 million bond-interest payment. The missed payment prompted bondholders to push for bankruptcy.

Four days before its Chapter 11 filing, the casino company's namesake tycoon, chairman and founder Donald Trump, and his daughter, Ivanka, severed ties with the firm. The duo were on the company's board of directors.

It is uncertain if this bankruptcy could upend another Trump deal, which is scheduled to close May 26.

A New York development company -- Coastal Marina L.L.C., an affiliate of Coastal Development, L.L.C. -- announced plans a year ago to buy Trump Marina casino and turn it into a Margaritaville-themed casino. Coastal offered $316 million for the property, but the amount was lowered to $270 million as market conditions changed.

Charlie Leonard, a spokesman for Coastal Marina, said yesterday that the company was "continuing to work toward its goal of completing the acquisition of Trump Marina Hotel and Casino."

Stanziale, Trump Entertainment's attorney, said "the court proceedings will not impact whether a sale takes place. We're ready to proceed with a closing at this point."

But some gambling analysts are not so sure, given the credit crisis and also because the original October closing was missed.

"The financing markets are extremely challenging," said Alex Picou, managing director of gaming, travel, and leisure for KeyBanc Capital Markets Inc., of New York, "and deals are not done until a wire transfer happens.

"And at a time when financing is challenging, Atlantic City has a lot of competition and potential competition," he said.

The revenue numbers for Atlantic City continue to slump as a result of Pennsylvania slots parlors and the poor economy. The resort's 11 casinos combined reported a 19.4 percent decrease in revenue last month compared with March 2008.

Trump Marina and Trump Plaza reported revenue decreases of 32.2 percent and 29.4 percent. Only the Taj Mahal posted an increase among Atlantic City's casinos, 6.3 percent.

The company's next bankruptcy hearing date is scheduled for May 14.

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Copyright (c) 2009, The Philadelphia Inquirer

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