A case that could have major implications for Atlantic City's gambling industry wound down today in U.S. Bankruptcy Court in Camden, on the same day that revenue figures revealed a rough February for the resort.
Billionaire Carl Icahn and banker Andy Beal are vying to gain control of the three Trump casinos. Their bankruptcy-exit plan is locked squarely against a plan offered by the bondholders, Trump Entertainment Resorts Inc., and Donald Trump himself, with daughter Ivanka.
Attorneys for the two sides gave closing arguments today before Judge Judith H. Wizmur, who is expected to make a decision next month.
"What we're doing here is reducing the debt by a substantial amount, to a level that the company can handle," Trump Entertainment attorney Michael Walsh said in his nearly two-hour closing remarks. "Mr. Icahn just saw a bargain here."
Walsh said Icahn had neither a strategic vision for the casinos nor the support of the noteholders, the majority of whom voted for the bondholders/company plan, which would inject $225 million in equity into the company and guarantee the continued use of the Trump name on the casinos.
During the 21/2-week-long proceedings, attorneys for Icahn sought to make the casino company's finances, or lack thereof, the central point of their argument that the Icahn plan presented the Trump casinos their best chance for success.
"This company is burning cash," said Icahn lead attorney Jeffrey Jonas in his closing remarks. "It will continue to burn cash."
Jonas argued that the Icahn plan would offer $484 million to pay off first-lien notes in exchange for 100 percent equity of the firm and would completely deleverage the firm. He said it also gave the company the breathing room and capital to grow - especially as regional competition intensifies with Pennsylvania about to add table games, and as Atlantic City continues to lose market share.
Revenue figures released today by the New Jersey Casino Control Commission underscored as much.
The 11 Atlantic City casinos, battered by Pennsylvania slots parlors and three major snowstorms, reported $261.6 million in revenue last month, down 15.7 percent from the same month last year.
Every gambling hall in town reported a revenue decline, ranging from 0.3 percent at Caesars to 32.6 percent at the Atlantic City Hilton. Even the Borgata, the market leader, had a surprising 20 percent decrease - it took in $45.5 million in revenue last month, compared with $57.3 million a year ago.
Two of the three Trump casinos finished in the middle of the pack. The Trump Taj Mahal, the largest of the trio, had a 12.9 percent decrease, while Trump Plaza reported an 18.8 percent decline.
Trump Marina - which came up in Bankruptcy Court as likely to be sold by either side - fared the worst, showing a 29.1 percent revenue drop from a year ago. The decrease was the third-largest, after the Hilton's and Resorts' drop of 30.5 percent.
Meanwhile, despite record snowfalls throughout Pennsylvania that caused casino closures and made travel by prospective patrons difficult, that state's nine casinos reported a 15.6 increase in gross slots revenue from a year ago. They generated $168.3 million last month, compared with $145.6 million in February 2009, when there were only seven casinos in operation.
The top-grossing Pennsylvania property was Parx, formerly PhiladelphiaPark Casino & Racetrack, which took in $32 million, up 5.3 percent from a year ago. Harrah's Chester Casino & Racetrack was second at $24.7 million, though that was an 11.5 percent decrease from a year ago.