Leave it to Donald Trump to wait until 6PM on a Friday afternoon to announce he’s stepping down from the wobbly casino company that bears his name. Trump Entertainment has missed interest payments recently. It looks very much like the company is headed toward a second, or is third?, trip to bankruptcy court. Trump had served as chairman of the company. His daughter Ivanka also sat on the board. No word on her status.
Here’s Trump’s official statement:
“Based on the fact that I am not involved in the management of Trump Entertainment Resorts and that I strongly disagree with the bondholders’ decisions and actions, past and present, with respect to the company, and despite the fact that it currently has the right to use the name Trump for limited purposes, I have decided to resign from the Board of Directors. Moreover, the company has represented for quite some time substantially less than 1% of my net worth, and my investment in it is worthless to me now. I want to leave what I believe will become a highly volatile situation and focus on the many other opportunities that are available to me in these very troubled but exciting times.”
“During the past number of years, in exercising their oversight authority, the bondholder’s representatives have made a series of bad decisions and encouraged wasteful spending, which has led to severe problems within the company. The company is no longer operated to a standard consistent with other of my holdings, in particular, my real estate portfolio, and after dealing with bondholders of the company for an extended period of time, I sense no indication that this will change. I no longer wish to remain a member of the Board of Directors of a company that is controlled by representatives of the bondholders. My daughter, Ivanka, has chosen to resign as well. I will have certain ongoing contractual relationships with the company for a time, which I intend to abide by, and will monitor the situation and protect my rights as required.
“While The Trump Organization grows and flourishes, Trump Entertainment Resorts, of which I am a stockholder, has languished. The Trump Organization’s portfolio of residential, commercial, hotel, and golf properties has expanded all over the world, while Trump Entertainment Resorts has yet to diversify outside of Atlantic City. I have watched the collapse in enterprise value of the Atlantic City Tropicana, where bondholders’ values have been reduced to almost nothing. I do not want to take part in a similar fiasco here.
“Some time ago, I made an offer to buy the company in the hopes that I might be able to reverse its fortunes, but the bondholders turned me down. Now I will study and watch as the horrible and outrageous fees being paid to lawyers and consultants will suck the blood from the company. This internal turmoil will be compounded by dramatically deteriorating revenues across the board for casino companies in Atlantic City as the market tanks and competition from local markets grows. Again, look what has happened at the Tropicana.
“These are very tough times in Atlantic City. Almost every company is in serious financial trouble. Despite this, I will be watching closely and at some point in the future, I hope to return. I have many friends in Atlantic City and have great respect for the Casino Control Commission and other representatives of the State of New Jersey. Even though I am relinquishing my position on the Board of Directors, I remain very concerned about Trump Entertainment Resorts. I will give strong consideration to saving what was once a great casino hotel operation that bore my name. But unfortunately it is clear that I will have to work from the outside — the existing bondholder control will not permit a brighter future.”
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