The Trump Taj Mahal is in danger of becoming the latest Atlantic City casino to post bankruptcy.
New York Post reported that the 24-year-old casino along the AC’s famous boardwalk has broken some of its loan covenants and if it cannot strike a deal with its creditors, it could end up heading towards Chapter 11 reorganization.
However, according to NY Post’s source, Trump Entertainment Resorts has yet to come up with a deal with its creditors, putting the casino at risk of being forced into bankruptcy. The company is also working with restructuring adviser Houlihan Lokey.
There was an initial hope that the man who owns a lot of Trump Entertainment’s debt, Carl Icahn, would be open to the idea of converting casino’s debt into equity just to keep the 2,248-room hotel-casino out of Chapter 11. However, as days have progressed, no deals have been made.
The uncertain state of Trump Taj Mahal is yet another black eye to Atlantic City’s once proud casino industry. It started the year with 12 casinos and since then three casinos—the Atlantic Club Casino, the Showboat Casino, and most recently, Revel—have all closed. The fourth one, the Trump Plaza, is set to close later this month after the Miss America pageant.
The Taj is the second largest casino in Atlantic City with close to 150,000 square feet of gambling and this report of a potential bankruptcy filing puts in serious risk of joining its fallen comrades in the dirt.
In the first half of 2014, the Trump Taj Mahal reported a decline of 15.1% in revenue compared to last year’s numbers. It was the Atlantic City’s highest grossing casino before the Borgata opened in 2003. It’s gotten so bad for Trump Entertainment Resort’s casinos that it came to a point that Donald Trump sued the company earlier this month, demanding to have his name removed from the company’s two casinos. The impending closure of the Trump Plaza and this bankruptcy report of the Trump Taj Mahal might do it for him.