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.
Excerpts from the Honolulu Star Bulletin interview with Jimmy Buffett on Feb. 27th…
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“We’ve Got A lot to Drink About”
“"The new song was easy to write -- I mean, just look around!" he said with a laugh.”All you have to do is open the newspaper. And it's a work-in-progress. After Michael Phelps was kicked off the Kellogg's Corn Flakes box, I'm thinking of adding another verse about that in the song. All he did was smoke a little reefer!”
As for recordings, Buffett is planning to release a live acoustic album later this year comprising encores recorded during his most recent tour. “I know my fan base, Parrotheads who want to add to their collection. Thanks to them I've been surviving this long. The idea was, during every show last year, I looked through my catalog and went through the process of picking songs that would sound kind of unique in an acoustic setting. They were the kind of songs that would fit in an encore, where there is a mellowness about them. The audience has already been through a show with a high energy level, so it would be good to let them down gently."
Out of the 28 songs recorded, Buffett feels he's put together an interesting selection of originals and covers, "particularly ballads, where I use that little bit of opportunity to do songs that I really like."
Jake Shimabukuro
Hawaii's own ukulele virtuoso Jake Shimabukuro has been a regular on Buffett's tours since 2005. Buffett and the Coral Reefer Band welcome Shimabukuro with open arms whenever a date in the uke master's busy schedule opens up.
"The sad thing about today's world is that there seems to be a diminishing amount of authenticity everywhere in music. Jake, on the other hand, is a great, authentic performer and an incredible musician. I'm certainly in awe of that. The first time I watched him in a small club on Oahu, I just thought he was incredible live.
"There's a funny story about Jake when he first started playing with me and the band. One year, we were the headliner at the New Orleans Jazz & Heritage Festival -- 100,000 people, great show. But little did I know that he had picked to do another gig in town before we would go on, at the House of Blues, going on after the Radiators. Now, the Radiators are legendary in New Orleans -- they're like us back home in Key West -- and I thought, 'my God, the crowd's going to kill him,' because this is Jake's first solo show.
"So I went down to his gig, and I brought my security guards, just in case, to get him after he was done. Well, he killed all right -- he brought the house down! And here we were so worried for him. Jake just has no fear, no consternation, when he's on stage."
Shimabukuro considers Buffett "a real big brother." The ukulele-playing "little brother" will be showcased at Buffett's Waikiki restaurant at 7:30 p.m. Sunday, backed by his able band of Noel Okimoto, Dean Taba and Michael Grande.
Beachcomber Restaurant
"I've been a nomad with one foot in the Pacific, and now that I've put a place in Hawaii, it's given me a great excuse to play there."
With the help of his friend Jim O'Mahoney of the Santa Barbara Surfing Museum, Buffett purchased some of his collection for the restaurant. "There are some great boards and ukuleles and artifacts from Hawaii," he said, "koa wood guitars from the '80s and ukuleles used by Duke Kahanamoku, Mickey Rooney and Bing Crosby. I bought all of this specifically for the exhibit, because I feel it's important to include some local culture and history in each of my places across the country."
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