Is Trump Taj Mahal the next casino to close in Atlantic City? The owner of the casino indicated in its regulatory filing to the State Division of Gaming Enforcement that it was in trouble of running out of money to pay its bills and debts.
Given the financial situation of Trump Taj Mahal, many suggested that it could be the next casino that will join the list of those that closed its doors in Atlantic City.
Michael Mauboussin Tips From Great Investors [Pt.2]
This is the second part of a short series on Michael J. Mauboussin's research document reflecting on 30 years of Wall Street analysis published in 2016. Q3 2020 hedge fund letters, conferences and more The document outlined Mauboussin's observations of successful investors throughout his three decades on the Street. This article starts at point six. Read More
Trump Taj Mahal blames extremely cold weather
In its filing, Trump Taj Mahal Associates L.L.C., the owner of the casino stated that its cash flow had been “adversely affected” by several factors such as “extremely cold winter weather and frequent snowstorms in the Mid-Atlantic United States, increased utility costs, intense competition, and current economic conditions.”
The company also indicated that its bottom line was also negatively impacted by a steady decline in spending by visitors.
Trump Taj Mahal cannot guarantee revenue increases
The owner of Trump Taj Mahal said they needed to borrow money or restructure its business if will not be able to achieve a significant increase in revenue and improvement in operating results.
“The company will have difficulty funding its operations and meeting its payment obligations, unless the company is able to obtain additional sources of liquidity or restructure its business and/or its indebtedness and other obligations,” according to the filing.
In addition, the company emphasized that there is no guarantee that it will achieve revenue increases or that it will succeed in obtaining additional sources of liquidity.
Furthermore, Trump Taj Mahal indicated that it will not be able to pay its third-quarter taxes given its financial condition. The company said its tax payments would be suspended “indefinitely.”
The employees of Trump Taj Mahal could receive WARN notices regarding the potential closing of the casino, according to a tweet sent by Roger Gross, the publisher of Global Gaming Business magazine. The Worker Adjustment and Retraining Notification (WARN) Act require employers to notify workers 60 days in advance about closings and mass layoffs.
Three casinos already closed in Atlantic City including Showboat, Revel, and The Atlantic Club. The Trump Plaza is scheduled to close on September 16.