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After his Atlantic City casino chain rejected his buyout offer and descended into bankruptcy, Donald Trump and his daughter Ivanka resigned from the board and he proclaimed that he wanted nothing more to do with the company.Let the back-tracking begin. The Associated Press reports that Donald Trump is making an offer to acquire the company out of bankruptcy with the backing of Dallas-based Beal Bank. His offer will have to beat out a competing offer made by the bondholders. Since neither offer was publicly filed with the bankruptcy court, it's hard to handicap the Donald's chances.
The Atlantic City casinos have filed for bankruptcy twice in the past five years, and have been unable to compete in the highly competitive market because of a crushing debt load.
But before the company gives Trump another shot, it should take a look at the manner in which he milked the already dry casinos while he was the chairman of the board of directors. As I wrote back in March of 2008, " Mr. Trump was paid $2 million for serving as chairman in 2007 -- a sum that I would say is completely undeserved, given the company's lack of performance while he devoted his time to sparring with Rosie O'Donnell on daytime talk shows." In addition, he profited by renting office space to the company and selling bottled water and other Trump-brand merchandise to it.
Is that what sent the company into bankruptcy? Of course not. But a company as overleverage as Trump should have been conserving cash, not paying outrageously inflated salaries to its non-executive chairman of the board while he collects fees from the company for all kinds of other services.
I would say the future of Trump Entertainment Resorts will be brightest without Trump.
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