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Trump Entertainment: third time unlucky in Atlanta?
Trump Entertainment Resorts, the company behind Atlanta's Taj Mahal, Trump Plaza Hotel & Casino and the Trump Marina Hotel Casino, has filed for chapter 11 bankruptcy protection, its third such filing in sixteen years.
In February, the company failed to meet extended deadlines for making a $53 million bond payment that fell due on 1st December last year, and as at 31st December it has debts of $1.74 billion with assets of $2.06 billion.
Shortly before the chapter 11 filing Donald Trump and his daughter both resigned from the company's board after an offer to buy the company and take it private was refused, then, at the end of February, trading in its shares was suspended as the stock was delisted by the Nasdaq exchange.
Just before delisting on Nasdaq, the share price reached an all-time low around six cents - during most of 2006 Trump Entertainment Resorts stock traded between $15 and $20, but the price went into progressive decline starting in February 2007.
On top of around $500 million of debt to banks, the company built up around $1.25 billion of bond debt, $250 million of which is personally guaranteed by Trump.
In a statement, Donald Trump laid the company's troubles firmly at the feet of the bondholder's representatives who he claimed "made a series of bad decisions and encouraged wasteful spending, which has led to severe problems within the company."
"Trump Entertainment Resorts, of which I am a stockholder, has languished. I have watched the collapse in enterprise value of the Atlantic City Tropicana, where bondholders' values have been reduced to almost nothing. I do not want to take part in a similar fiasco," he said.
