Embattled Trump Dukes It Out with Icahn in Atlantic City

As recently as the late 1990s, Donald Trump seemed proud to be the face of three eponymous Atlantic City casinos owned by Trump Entertainment Resorts. He celebrated his birthday at one of the properties every year, mingling with high rollers, shaking hands -- though that's a practice he detests -- and happily promoting this trio of seaside gambling dens: Trump Plaza, Trump Taj Mahal, and Trump Marina.

But in the past decade, while the Donald dutifully fulfilled his contractual obligations to make appearances, he reportedly walked through the meet-and-greets without a whole lot of gusto. That no doubt correlates with what's at stake for Trump in Atlantic City.

When Trump first opened Trump Plaza in Atlantic City in 1984, he had majority ownership. But Trump Entertainment Resorts (TRMPQ) has filed for bankruptcy three times. In February, Trump resigned from the company, just before its third filing. Bankruptcy hearings are underway in nearby Camden, to determine who gets to own and run the properties.

In the Red Trunks: Carl "Boom-Boom" Icahn

Although he has watched his properties deteriorate, Trump seems desperate to reattach himself -- especially now that corporate raider Carl Icahn is rallying to take over the ailing Trump company. Icahn seems to be in an acquiring mood: On Wednesday, the New Jersey Casino Control Commission granted approval for him to take ownership of another bankrupt Atlantic City gambling den, the Tropicana Casino Resort.

One Trump bondholder who hopes Icahn prevails is Andy Beal, the Texas billionaire banker who became famous after winning millions playing poker against some of the world's greatest players. Beal had invested with Trump, sold some of his shares to Icahn, and is still in for approximately $486 million.

"Beal is the one who brought in Icahn" as a potential buyer, says Roger Gros, publisher of Global Gaming Business and a chronicler of South Jersey's foundering casino scene for the past 30 years. "He knows that if Icahn buys the casinos, Icahn will operate them cheaply, make a small profit, and flip them when the time is right. Andy would be an equity partner, and he wants to be there when the casinos get flipped. For him, that is the light at the end of the tunnel."

Trump: A $3 Billion Brand?

Trump's proposed reboot carries no hint of a sale. His plan -- which is preferred by casino management, unionized workers, and most of the bondholders -- will have bondholders kicking in $225 million to get things going again, and Trump himself receiving up to 10% of the company in exchange for staying involved.

Gros figures that, beyond the 10%, Trump's interest entails protecting the perceived value of his name. Indeed, having the name Trump on a failed casino is hardly an asset. "Outside of Andy Beal, most of the creditors also think there's value in the name," Gros says. "Personally, I think it's worn out."

Trump, of course, has his own opinions. On the stand recently, in typical irascible style, he sniped that he'd be shocked if Icahn spent three dollars on improving the Atlantic City properties. He also stated that his name, as a brand, is worth $3 billion, and that if Icahn takes control, he will remove the Trump name.

Unperturbed, Icahn countered that the biggest consequence of going Trumpless will be the cost of replacing signage.

And so "The Donald and Carl Show" grinds on in Camden, N.J., providing the kind of ringside entertainment that would surely give a boost to the Xanadu Theater at Trump Taj Mahal.