Trump Entertainment Resorts Inc., real estate tycoon Donald Trump's casino group, filed for Chapter 11 bankruptcy Tuesday morning, court documents show.
The petition listed less than $50 million in assets and nearly $500 million in debt, according to a petition filed today in U.S. Bankruptcy Court in Camden, New Jersey.
The company's board was scheduled to meet late Monday night to decide whether to authorize the filing. It is believed the casino operator would have otherwise been forced into bankruptcy involuntarily by creditors.
The filing marked the third appearance in bankruptcy court for Trump Entertainment, which most recently emerged from bankruptcy proceedings in 2005.
The board meeting follows months of negotiations between the real-estate mogul and his casino group's bondholders, who had given the company several waivers to delay an interest payment due late last year. Late last week, the bondholders told the company they would seek an involuntary bankruptcy proceeding to force the company into Chapter 11.
Trump, founder of the company, resigned as chairman of the board late Friday night, saying he disagreed with the actions of bondholders, many of which backed the casino when it exited bankruptcy last time. His daughter, Ivanka Trump, also resigned from the board.
Trump holds 28 percent of the company's stock, according to a recent filing. Shares of Trump Entertainment Resorts trade at around 23 cents, down from more than $4 a year ago.
"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," said Trump, in a statement.
"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. ... 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," Trump added.
Trump Entertainment Resorts missed a bond payment of $53 million due earlier this year saying it needed to conserve cash. The latest waiver from bondholders expires Tuesday morning.
The casino operator isn't related to Trump's real-estate holdings in New York, Chicago and elsewhere. But the casinos can continue to use Trump's name, despite his departure and any bankruptcy proceedings.
The company operates the Trump Taj Mahal Casino Resort and Trump Plaza Hotel & Casino on Atlantic City's Boardwalk, and the Trump Marina Hotel Casino in Atlantic City's Marina District. It agreed to sell Trump Marina Hotel Casino last May but the deal still hasn't closed.
A spokeswoman for Trump Entertainment declined to comment.
Trump Entertainment has a total of $1.25 billion in bond debt. It also has about $500 million in bank debt.
Most of the casino industry is laboring under heavy debt, as consumers have cut back on casino visits and spending in the past year. Major Las Vegas casino companies like Harrah's Entertainment Inc., MGM Mirage and Las Vegas Sands Corp. have been forced to sell properties at big discounts, cut thousands of employees and halt planned development. At least one operator, Station Casinos Inc., is contemplating bankruptcy protection.
But Atlantic City has been struggling much longer. It has been battered by competition and a fading image as new casinos have emerged and expanded in neighboring states like Pennsylvania, New York and Connecticut.
Atlantic City posted the biggest drop in gambling revenue in its history in December, with an 18.7 percent decline from a year earlier. According to state regulators, the city's casinos posted a 9.4 percent decline in January.
Several Atlantic City casinos are in severe distress. The Tropicana is up for sale in bankruptcy court, and Resorts Atlantic City is facing foreclosure.
Atlantic City's older casinos have had a tough time competing against new luxury properties. One exception: Trump's Taj Mahal, which recently added a luxury tower. The casino posted a revenue increase of nearly 10 percent in January, compared with a year earlier.
Trump Entertainment has hired the law firm of Weil Gotshal & Manges LLP as bankruptcy counsel and Lazard Ltd. as financial advisers.
Bondholders have hired the law firm of Stroock & Stroock & Lavan LLP as bankruptcy counsel. They also have hired the investment-banking firm of Houlihan Lokey Howard & Zukin as financial advisers.
The Wall Street Journal contributed to this report.