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Trump Expected to File Bankruptcy for Casinos

CHERRY HILL, New Jersey – As reported by the South Carolina State: "— Donald Trump's casino operations are expected to file for Chapter 11 bankruptcy as early as Monday, as part of an effort to upgrade his Atlantic City, N.J., gaming properties and refinance $1.8 billion in debt.

"It will be Trump's second attempt since August to turn around his casinos. The first ended in late September, when the developer and reality TV star halted negotiations with Credit Suisse First Boston and began looking for new investors.

"Under a new refinancing plan announced last month, Morgan Stanley will provide a $500 million line of credit to Trump to overhaul his casinos and expand into other jurisdictions, including Pennsylvania and Las Vegas. Another lender, Beal Bank, will give $100 million in interim financing.

"…Trump said refurbishing his three Atlantic City casinos remains a top priority.

"…Trump has struggled with onerous interest payments for years, emanating from the construction of the $1 billion Trump Taj Mahal, his flagship Atlantic City casino.

"…In addition to the Trump Taj Mahal, Trump owns Trump Plaza Hotel and Casino and the Trump Marina Hotel Casino. Collectively, the three casinos, which employ more than 8,000, have not turned a profit since 1995. Trump Hotels incurred operating losses of $87 million in 2003. For the nine months ended Sept. 30, 2004, the company lost $91.5 million.

"Barbara J. Cappaert, an analyst for KDP Investment Advisors, who has followed Trump for a decade, said the latest plan was not as sound as the first.

"…But Andrew Zarnett, an analyst for Deutsche Bank Securities, said the increased popularity of the Trump brand was an asset…"

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