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Friday, September 24, 2004

Indiana Law - Trump casino contract at issue?

"Bailout for Trump collapses: Bankruptcy looks likely for company developing second Indiana casino," reads the headline to this AP story today in the Indianapolis Star. The lead and some further quotes:

ATLANTIC CITY, N.J. -- Donald J. Trump may have a new project for his apprentices -- helping him figure out how to take his troubled casino company private after a proposed bailout fell through. * * *

In Indiana, Trump's company has a riverboat casino in Gary and a license to create a $108 million casino complex in French Lick. Robert Pickus, executive vice president of the Trump casino company, has said that the French Lick proposal relied on the success of refinancing. * * *

One analyst said it is unlikely Trump could raise the money to take the company private. Without a cash infusion, bankruptcy appears to be his only option, according to casino industry analyst Jane Pedreira of Lehman Brothers.

"He's in a tough spot right now," said Pedreira. "If he has to file, his name will be in the press for two years or however long it takes to get through bankruptcy."

Lesley Stedman Weidenbener reports today in the Louisville Courier Journal, in a story headlined "Trump financial woes unsettle casino plans":
INDIANAPOLIS — Indiana regulators have "concerns" about whether Trump Hotels & Casino Resorts Inc. can develop a casino in French Lick after a proposed bailout of the troubled company fell through, a key official said yesterday.

But Glenn Lawrence, executive director of the Indiana Gaming Commission, said it's too soon to discuss choosing another company.

"I don't want to speculate," Lawrence said. "When they (Trump) were chosen, we knew they had those financial difficulties, and they still have cash to operate."

But Lawrence told Trump executives to appear before the gaming commission Oct. 1 in Indianapolis to answer questions about the company's financing, as well as the French Lick project and its casino riverboat in Gary.

"We do have some concerns," Lawrence said, adding that commission members need more information to determine "if they want to proceed" with Trump as the casino operator.

Although the commission voted in July to give the contract to Trump, it remains unsigned. Commission staff and Trump executives have been negotiating its details, Lawrence said.

That process was expected to be completed in October. But state law gives the commission the option of choosing another developer if it can't come to terms with Trump.

[More] I just opened my NY Times and found this story, headlined "Now, Reality for Trump Looks More Like 'Survivor.'" A quote:
"I think this could get ugly because we're about to see a very high-level game of chicken," said Dennis J. Drebsky, a New York bankruptcy lawyer who has been involved in the restructuring of other Atlantic City casinos. "Your guess is as good as mine as to what happens next."

Posted by Marcia Oddi on September 24, 2004 08:45 AM
Posted to Indiana Law