Trump Entertainment Resorts (OTC:TRMYQ) has come out of bankruptcy thanks to exit financing from Carl Icahn, who could be Trump’s Treasury Secretary
Donald Trump may be leading the race for the Republican Presidential nomination, but the businesses which carry his name are not seeing as much success. Trump Entertainment Resorts (TER) has finally come out of its latest bankruptcy thanks to $82.5 million in exit financing from Icahn, who now owns the company properties, writes Chris DeMuth Jr. for Seeking Alpha. Trump is the founder of the company but has not owned it for the past 4 years.
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Icahn takes over Trump Entertainment Resorts’ properties
Icahn now owns company properties including the Taj Mahal and Trump Plaza Hotel and Casino in Atlantic City. The casino business has suffered multiple bankruptcies, and used the bankruptcy process to guard against litigation, cut the cost of labor and restructure debts that it defaulted on.
Before TER went bankrupt, Trump Atlantic City (TAC) declared bankruptcy, then Trump Hotels & Casino Resorts went bankrupt, then TAC suffered another bankruptcy. The TER bankruptcy was declared in order to deal with $285.6 million in outstanding secured debt, $13.5 million of trade debt and $6.6 million in unpaid interest.
As a result TER could then use the courts in order to dismiss a collective bargaining agreement which had previously covered 1,467 staff.
Controversial record in Atlantic City comes up on campaign trail
The Republican candidate hasn’t owned TER for 4 years, but his poor record in Atlantic City has become a subject of conversation on the political campaign trail. At a Republican debate in Houston, Trump said that opponent U.S. Senator Marco Rubio didn’t know “anything about business.”
“I don’t know anything about bankrupting four companies,” Rubio responded.
The downturn in fortunes at the Taj Mahal came at the same time as Atlantic City suffered a raft of closures, with 4 out of 12 of the city’s casinos closing their doors. New owner Carl Icahn is certain that things will improve.
“The Taj is one of Atlantic City’s signature properties,” Icahn said in a statement. “Although both Atlantic City and the Taj have had a few tough years, today marks the beginning of the turnaround.”