ATLANTIC CITY - Three bankruptcy filings and Donald J. Trump's resignation as board chairman of Trump Entertainment Resorts Inc. have thrown the casino company into turmoil.
Finalizing the sale of Trump Marina Casino Hotel looks more remote than ever - but not because of those reasons.
The interested buyer, Coastal Development L.L.C., of New York, has not secured the financing to close the deal May 26 - the targeted closing date, according to those familiar with the sale negotiations.
Analysts of the gaming industry predict the sale will not happen any time soon, because of tight credit and the declining financial performance of the property.
"Coastal Marina [an affiliate of Coastal Development] is closely monitoring news and events in Atlantic City and needs to fully evaluate the developing situation and its effects on Coastal Marina's interests," said Charlie Leonard, spokesman for Coastal Development.
While Leonard stopped short of blaming the credit markets, Trump Entertainment chief executive officer Mark Juliano was more emphatic.
"The bankruptcy filing had no impact on the Trump Marina sale," he said Tuesday, the day Trump Entertainment filed for Chapter 11 protection. "The credit markets will have more of an impact. This is an extremely difficult climate to try to finance deals like this."
Yesterday, Juliano said, "I remain confident that the deal will close."
The scheduled date for closing the deal already has been delayed once. The Marina sale was revised last fall, reducing the price to $270 million, from the original offer of $316 million.
A deadline to close the deal in October was moved to May 26 - and there is little to indicate that the two parties will make that deadline.
Coastal said it planned to transform the Trump Marina into a Margaritaville-themed casino using entertainer Jimmy Buffett.
"Coastal likely hasn't obtained financing yet," said analyst Kim Noland of Gimme Credit L.L.C. in a scathing report of Trump Entertainment to investors Wednesday. "And Coastal's owner said it needed to fully evaluate the developing situation, not exactly a strong affirmation of its intention."
The Marina casino, which opened June 19, 1985, is the worst performer among the three Trump properties here. Its precipitous revenue decline - a 15.8 percent decrease in 2008 compared with 2007 - and that of the overall Atlantic City gambling market in the last several months, make it an even tougher sell.
"You have a shrunken bank group unwilling to lend or underwrite these things," said high-yield bond analyst Barbara Cappaert.
Cappaert, of KDP Investment Advisors Inc., of Montpelier, Vt., added: "For a property struggling and on the market for a long time with no really clear-cut end to the pressures - like the Marina - it's very difficult for anybody to come in and fund that deal. The cash flow of the Marina has just been abysmal. It needs a turnaround in a very tough environment."
Adding to the challenges, Trump and his daughter, Ivanka, resigned from the board of Trump Entertainment last Friday. He blamed his increasing dissatisfaction with the company's bondholders.
Four days later, Trump Entertainment filed for Chapter 11 in U.S. Bankruptcy Court in Camden - its third trip as a public company.
U.S. Bankruptcy Court Judge Judith Wizmur yesterday granted a request by Trump Entertainment to continue paying its vendors. She also granted the company's request to use the cash it has on hand to continue operating the three Trump casinos.