Trump Resigns Trump Entertainment as Deadline Looms

Donald Trump resigned from the board of debt-laden Trump Entertainment Resorts Inc. as the company he founded faced a possible bankruptcy next week.

“I have nothing to do with it. I’m not in it, I’m not on the board,” Trump, who was chairman, said in a telephone interview. He said he had “no idea” whether there will be a bankruptcy filing.

Trump Entertainment faces a Feb. 17 deadline to make a $53 million bond payment, a target extended four times since the initial grace period ended Dec. 31. If an agreement can’t be reached this weekend the company may file for Chapter 11 early next week, or the bondholders may force it into involuntary bankruptcy, said a person familiar with the discussions.

Trump controls 28 percent of the stock, according to a March 21 regulatory filing. His daughter, Ivanka Trump, also quit the board, according to an e-mailed statement. Trump offered to buy the rest of the company and was turned down by bondholders, he said.

“I strongly disagree with the bondholders’ decisions and actions,” Trump said. “Part of the reason that these bondholders can’t make a deal is they’ve lost so much money on other deals, they’ve lost so much money on this deal, and they’re probably going to lose so much money on other deals, that my impression is they don’t care.”

Deal Jeopardized

Trump’s departure may endanger Trump Entertainment’s $270 million sale of its Trump Marina Hotel Casino to Coastal Marina LLC, a deal inked in May and renegotiated to a lower price in October.

The sale price included settlement of an unrelated lawsuit Trump Entertainment filed against Coastal Marina’s Richard T. Fields, alleging he had done improper deals with the Seminole Tribe of Florida to develop two Hard Rock casinos, according to company regulatory filings. Donald Trump had earlier hired Fields to help the company win development deals with the Native American tribe.

Tom Hickey, a spokesman for Trump Entertainment, Chief Executive Officer Mark Juliano and Chief Financial Officer John Burke didn’t return phone messages left late yesterday and today.

“Unless we’re going to be responsible for management it’s just not something that’s worthwhile,” Trump, 62, said. The Atlantic City, New Jersey-based casino operator first missed its bond payment on Dec. 1, saying in December it needed to conserve cash and hold debt-restructuring talks with lenders.

‘It’s a Disaster’

Trump said the fate of Atlantic City’s Tropicana Casino Hotel and the under-construction Revel Entertainment LLC project factored into his decision to leave Trump Entertainment.

“It’s a disaster and I see what’s happened with so many others, and I don’t want to be a part of it,” Trump said.

Tropicana Entertainment LLC was pushed into bankruptcy after being stripped of its New Jersey gambling license. State officials said in December 2007 that the Tropicana Casino Hotel’s service and cleanliness had declined and the property wasn’t being run according to state regulations.

Revel Entertainment last month suspended interior work, unable to secure needed financing to finish construction at the 20-acre boardwalk site. Revel had been scheduled to open mid- 2010.

Trump Entertainment’s three casinos have been through bankruptcy twice. Holders of most of company’s $1.25 billion in notes and Beal Bank Nevada, which is owed $490 million, have agreed not to exercise default rights for interest or principal payments until 9 a.m. New York time on Feb. 17.

Trump is “not thrilled” the company may continue to use his name, he said.

‘Bad Decisions’

The company’s market value has tumbled to $7.3 million from its peak at $842 million in August 2005.

Trump Entertainment’s 8.5 percent notes due June 2015 traded at 14 cents on the dollar yesterday, according to Trace, the bond-pricing system of the Financial Industry Regulatory Authority.

Bondholder representatives “have made a series of bad decisions and encouraged wasteful spending, which has led to severe problems within the company,” Trump said in the statement. “The company is no longer operated to a standard consistent with other of my holdings.”

Legal and consulting fees “will suck the blood from the company” as Atlantic City “tanks and competition from local markets grows,” he said.