NEW YORK ( The Deal) -- Struggling Atlantic City, N.J., could be dealt another blow now that the parent company of the two Trump casinos in the city has filed for bankruptcy again after enduring years of a contracting gaming market.
Trump Entertainment Resorts Inc., the owner of the Trump Taj Mahal Casino Hotel and the Trump Plaza Hotel and Casino, submitted a petition on Tuesday in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. Seven affiliates also filed petitions the same day.
In court papers filed Tuesday, Trump Entertainment sought approval of a slew of first-day motions, including requests for joint administration of the cases, to pay vendors, continue customer loyalty programs, use its cash management system, make payroll and use its cash collateral.
Judge Kevin Gross had not set a hearing on the matters as of Tuesday morning.
In court papers, CEO Robert Griffin said Trump Entertainment intends to close the Plaza on Sept. 16, and without major expense reductions and concessions from union workers employed at the location, the debtor will be forced to close the Taj Mahal by Nov. 13.
The closures would add to a particularly dismal year for Atlantic City: Revel AC Inc. closed its doors on Sept. 2 after it failed to find a buyer, Showboat Atlantic City shut down on Aug. 31 and the Atlantic Club Casino Hotel turned off its lights on Jan. 13.
In court papers, Trump Entertainment blamed its bankruptcy on negative Ebitda combined with crushing first-lien debt -- to the tune of $285.6 million, with an annual debt service expense of $38 million.
The debtor attributed its financial woes in part on a declining Atlantic City gaming market: gross gaming revenue in the area in 2013 was down 6.2% from the previous year. Trump Entertainment said increased competition within the city from new players such as Revel and the rebranding of Resorts Casino Hotel as Jimmy Buffett's Margaritaville, led to a decreased market share for the Trump properties.
The debtor also pointed out that competition from new casinos in nearby states, including Delaware, Maryland, New York and Pennsylvania, as well as a legislative push to legalize gambling in New Jersey outside of Atlantic City, further compounded the company's financial problems.
Trump Entertainment also said its business was hurt during Superstorm Sandy -- due to its properties' closure and "extensive damage" sustained by its main market. The company has submitted a $14 million business interruption claim to its insurance company, which is still pending.
This is not the casinos' first trip to bankruptcy court -- predecessor entities put the Trump Plaza, Trump Taj Mahal and a third property, the Trump Marina, into Chapter 11 on July 17, 1991, in New Jersey. They exited on Oct. 4, 1991.