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US Bankruptcy Judge Kevin Gross of Delaware, has ordered Trump Entertainment Resorts to “show cause as to why the court should not convert its case for bankruptcy”. The Judge has scheduled a court hearing for 4 December, which will assess whether Trump Entertainment Resorts files for formal liquidation under Chapter 7 of the US bankruptcy code.
Under Chapter 7 of the US Bankruptcy Code a trustee would be appointed to make decisions for the company and sell its assets.
Trump Entertainment’s decline has been well documented, as the casino operator has suffered continued losses and deteriorating asset values. The company stated that at present it did not have the financing support to continue its operations.
Trump Entertainment filed for bankruptcy Sept. 9 and shut the Trump Plaza days later as Atlantic City loses gambling business to surrounding states. Casino revenue in the city fell more than 40 percent to about $2.8 billion in 2013 from a peak of more than $5 billion in 2006.
Trump’s Atlantic City Taj Mahal Entertainment Resort is set to close on 12 December, becoming the fifth Atlantic City casino to close its operations in 2014.
Trump Entertainment management appear to be focusing on gaining investment/re-financing from billionaire Carl Icahn who controls the operators debt. Under a proposed restructuring plan, Icahn would take over the company as primary lender and inject $100 million in capital.
In order to entice Icahn, Trump Entertainment have requested that New Jersey offer it state and Atlantic City tax breaks.
