Trump Hotels & Casino Resorts was founded in 1995 by Donald Trump, who has not had any formal role in the company since 2011 if not earlier.The company filed for bankruptcy in 2004, 2009 and 2014.
History
Entrance to the Trump Taj Mahal at night, Atlantic City, New Jersey
Donald Trump began purchasing properties along the Atlantic City boardwalk in the early 1980s and received a casino license from the New Jersey Casino Control Commission (CCC) on March 15, 1982.[2] He had planned to build his own casino on the boardwalk, but was stalled on the project when Mike Rose, then CEO of Holiday Inn and Harrah's approached him to manage construction of a Holiday Inn Casino-Hotel. It opened in May 1984 and two years later Trump bought out Holiday Inn's shares in the property and renamed it the Trump Plaza Hotel and Casino.[3]
In 1985, Trump purchased the nearly-complete Atlantic City Hilton hotel and casino property at the Atlantic marina from Hilton Hotels for $325 million. The hotel chain sold the property after its application for a gaming license was turned down by the CCC.[4] Trump originally opened the property as Trump's Castle Hotel Casino, and later renamed it the Trump Marina.
In 1988, Trump purchased the unfinished Taj Mahal property from Resorts International for $230 million after negotiations with Merv Griffin in which the two men divided the assets of the failing company.[5] The casino, at the time the largest in Atlantic City, would eventually cost almost $1 billion by the time it opened in 1990. Trump completed the project using junk bonds, a decision that hurt the company afterward as the gaming industry struggled in a recession and interest rates became unmanageable.
In 1995, Trump established Trump Hotels and Casino Resorts (THCR) as a publicly traded company, granting it ownership of the Trump Plaza and the under-development Trump Casino in Gary, Indiana.[8] The following year, THCR bought the Trump Taj Mahal at a valuation of $890 million,[9][10] and bought the Trump Castle from Trump for $486 million (including $355 million in assumed debt).[11]
In 1996, the company opened Trump World's Fair, a casino adjunct to the Trump Plaza.[12] The World's Fair was closed in 1999, with plans to replace it with a larger resort.[13]
In 1997, THCR was one of eleven applicants for three casino licenses available in Detroit, with a $542-million proposal for the Trump Motor City Hotel Casino, in partnership with Mel Farr.[14] The bid was ultimately dropped from consideration because of Mayor Dennis Archer's doubts about the company's financial condition.[14]
In 1998, THCR business consultants spent at least $68,000 on a trip to Cuba in violation to the United States embargo against Cuba. According to a report by Newsweek, the consulting firm Seven Arrows Investment and Development instructed THCR on how to evade the embargo by linking the money to a charitable effort.[15]
In 1999, THCR agreed to purchase the Flamingo Hilton Casino Kansas City for $15 million,[16] but the deal fell through when Missouri gaming regulators did not approve the company's gaming license by a contractual deadline.[17]
THCR entered a management agreement in 2000 to operate the Spotlight 29 Casino, an Indian casino in Coachella, California.[18]
Financial troubles
Trump Entertainment Resorts and its predecessors have filed for Chapter 11 bankruptcy protection four times, in 1991, following construction of the $1-billion Trump Taj Mahal, and in 2004, 2009 and 2014.
In 2004, Trump Hotels & Casino Resorts explored various options for restructuring its debt, amid speculation that it might file for bankruptcy. A possible arrangement with Credit Suisse First Boston was not completed because the bondholders rejected it.[19]
On October 21, 2004, the company announced a preliminary agreement with its investors. Trump, who had been the majority owner, would reduce his stock ownership from 56 to 27 percent. Bondholders would surrender some of their debt in exchange for stock. On October 27, the company announced that Morgan Stanley would be the joint lead arranger for a $500 million financing as part of the restructuring plan. On November 21, the company filed for bankruptcy. Trump said the filing was "really just a technical thing" as the best way to implement the restructuring plan.[20] The plan was submitted to the Bankruptcy Court on December 16, 2004.
After the 2004 bankruptcy, Trump Hotels & Casino Resorts changed its name to Trump Entertainment Resorts (TER).
In 2005, the company's involvement in the Spotlight 29 Casino ended, as the tribe bought out the casino management agreement for $6 million.[21] Later that year, TER sold its Indiana casino to The Majestic Star Casino, LLC for $253 million.[22][23] The company had also been awarded a license to build a second casino in Orange County, Indiana, but dropped this plan, due in part to the state's concerns about the company's viability.[24]
In 2007, the company attempted to negotiate a buyout with several public and private firms, but on July 2, it announced that it could not reach a deal, and would take itself off the market. The company planned to lay off employees in order to cut costs.[25]
2009 bankruptcy and restructuring[edit]
The casino group filed for bankruptcy again in February 2009,[26][27] owing $1.2 billion. Two sets of debt holders eventually proposed reorganization plans for the group in U.S. bankruptcy court.
Trump initially made an agreement with banker and poker player Andrew Beal, owner of Beal Bank, which held $500 million in the group's debt, to take over the resorts. However, citing concerns about the bank's lack of gaming experience, he dropped them in favor of hedge fund Avenue Capital Management, a plan favored by other bondholders. Beal then partnered with investor, Carl Icahn, who had worked on restructuring another Atlantic City casino, the Tropicana.[28] In court, Trump argued that he would fight the Icahn/Beal team if they sought to use his name and likeness on the group's properties. Instead he signed an agreement with Avenue Capital in which he would receive 5% stock in the reorganized company and another 5% in exchange for the use of his name and likeness in perpetuity.
The bankruptcy court eventually sided with the Trump/Avenue partnership, favored by bond holders who believed that Trump's brand would result in a stronger company after reorganization.[30]
In 2011, TER sold the Trump Marina to Landry's Restaurants, which also operates the Golden Nugget in Las Vegas.