KEY POINTS:
Donald Trump resigned from the board of debt-laden Trump Entertainment Resorts Inc as the company he founded faces a possible bankruptcy this week.
"I have nothing to do with it. I'm not in it, I'm not on the board," Trump, who was chairman, said in a telephone interview. He said he had "no idea" whether there would be a bankruptcy filing.
Trump Entertainment faces a deadline of tomorrow to make a US$53 million ($100 million) bond payment, a target extended four times since the initial grace period ended on December 31.
If an agreement can't be reached the company may file for Chapter 11 early this week, or the bondholders may force it into involuntary bankruptcy, said a person familiar with the discussions.
Trump controls 28 per cent of the stock, according to a March 21 regulatory filing. His daughter, Ivanka Trump, also quit the board, according to an emailed statement.
Trump offered to buy the rest of the company and was turned down by bondholders, he said. "I strongly disagree with the bondholders' decisions and actions," Trump said. "Part of the reason that these bondholders can't make a deal is they've lost so much money on other deals, they've lost so much money on this deal, and they're probably going to lose so much money on other deals, that my impression is they don't care."
Trump's departure may endanger Trump Entertainment's US$270 million sale of its Trump Marina Hotel Casino to Coastal Marina LLC, a deal inked in May and renegotiated to a lower price in October.
The sale price included settlement of an unrelated lawsuit Trump Entertainment filed against Coastal Marina's Richard T. Fields, alleging he had done improper deals with the Seminole Tribe of Florida to develop two Hard Rock casinos, according to company regulatory filings.
Donald Trump had earlier hired Fields to help the company win development deals with the Native American tribe.
Tom Hickey, a spokesman for Trump Entertainment, chief executive officer Mark Juliano and chief
financial officer John Burke didn't return phone messages left over the weekend.
The Atlantic City, New Jersey-based casino operator first missed its bond payment on December 1, saying in December it needed to conserve cash and hold debt-restructuring talks with lenders.
Trump said the fate of Atlantic City's Tropicana Casino Hotel and the under-construction Revel Entertainment LLC project factored into his decision to leave Trump Entertainment.
"It's a disaster and I see what's happened with so many others, and I don't want to be a part of it," Trump said.
Tropicana Entertainment LLC was pushed into bankruptcy after being stripped of its New Jersey gambling licence. State officials said in December 2007 that the Tropicana Casino Hotel's service and cleanliness had declined and the property wasn't being run according to state regulations.
Trump Entertainment's three casinos have been through bankruptcy twice.
Holders of most of the company's US$1.25 billion in notes and Beal Bank Nevada, which is owed US$490 million, have agreed not to exercise default rights for interest or principal payments until 9am New York time tomorrow.
Trump is "not thrilled" the company may continue to use his name, he said.
- BLOOMBERG
