On Monday Trump Entertainment Resorts announced it had missed a payment of US$53.1 million in bond interest and was looking to restructure around US$1.25 billion of corporate debt. The same day the US Bankruptcy Court was asked by seventeen shareholders to order the company to pay US$4.1 million from a bankruptcy settlement three years ago. The motion filed requests that the three Trump Atlantic City casinos be liquidated if payment is not made immediately.

Trump Entertainment Resorts disputes the motion on the basis that the shareholders sold their stock. However, the Bankruptcy Court ruling that said the seventeen shareholders should not have been part of the investor settlement was overturned in federal court and that decision was upheld last month by a federal appeals court. According to the judgment the dispute should go back to the bankruptcy court for further consideration.

The demand for US$4.1 million must seem a minor problem for Trump Entertainment Resorts at the moment. The company has already been revamped three times, emerging from bankruptcy courts with new names but seemingly unable to improve performance. Of course, the downturn in the economy that has hit Atlantic City particularly badly has been a further nail in the coffin for the company. In just two years from the last company reorganization, it has lost 99% of its value and is presently trading at 27 cents.

Donald Trump seems to emerge relatively unscathed by the problems besetting his companies and is said to have personal wealth of about US$3 billion. Trump Organization yesterday denied it was scaling back on developments, including a luxury US$1.5 billion golf resort in Scotland, because of the credit crunch and legal and financial disputes. It has been reported that work on a skyscraper development in Dubai and apartments in Philadelphia have been put on hold.

Deutsche Bank is suing Trump because of a missed loan repayment of US$334 million for a half-built hotel and condominium complex in Chicago, but could be said to have been ‘trumped’ by a lawsuit previously filed by Trump saying the credit crisis is an act of God and the bank should have allowed an extension.

The Teflon-coated ‘king of capitalism’ may once again emerge unsullied by the present crises besetting his companies but in Scotland there are calls for Aberdeenshire Council to insist on a completion guarantee for the golf development, which should not be hard to come by if Trump Organization has the US$1.5 billion in available funds that it claims. (E-12.03.08)

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