Just when you thought that Donald Trump could not come up with a new way to spin The Apprentice, he trumps you. That's because last night, Trump fired Trump from his role on the board of Trump Entertainment Resorts (NASDAQ: TRMP). The reason is simple -- Trump Entertainment bondholders are owed $53 million; the Donald stiffed them; and now the bondholders want Trump Entertainment to file for Chapter 11.
The Donald's self-firing is the latest salvo in a lengthy war between himself and his bondholders. A few weeks ago, I posted on the imminent deadline for a resolution of the matter. But Trump bondholders gave him a temporary reprieve until this coming Tuesday. And the Donald has mentally checked out of this mess boasting about how little it means to him -- "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," according to the Wall Street Journal (subscription required).
Trump Entertainment is an ugly business. Its stock has fallen from $4 to 23 cents. With $958 million in revenue and 6,800 employees, its casinos include 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. But its $1.25 billion in bonds, which were issued in 2005 and come due in 2015, lack sufficient assets to secure the principal and interest as far as bondholders are concerned. And the recession is not helping Trump Entertainment's prospects.
Expect to see a headline next week on Trump Entertainment: "You're Bankrupt!"
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.
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