Barring a bailout, Trump Hotels & Casino Resorts may not be able to continue as a "going concern," auditors for Ernst & Young LLP warned in a letter to the company's board of directors.
Trump's three hotel-casinos in Atlantic City haven't earned a profit in seven years, and lost $87 million last year.
The Donald, as the mogul is known, has achieved renewed celebrity through the hit reality TV show, "The Apprentice." Each week, Trump eliminates one contestant from a team that fails to make as much money as a competing team.
The loser is summoned to a bogus boardroom built for the show and dismissed by Trump, who looks at the loser and announces, "You're fired." Trump is now trying to trademark that phrase.
Trump Hotels, which carries $1.8 billion in debt, has been unable to finance major capital improvements at its Atlantic City properties at a time when competitors have been luring away gamblers.
Last month, Trump announced that Credit Suisse First Boston had agreed to make a $400 million cash infusion into the company in exchange for a controlling stake. The deal would result in Trump's removal as chief executive officer. He would stay on as chairman.
The Credit Suisse deal hinges on whether bondholders will agree to the recapitalization. Asked Tuesday if he thought they would, Trump said: "We'll find out. We'll see what happens."
One analyst said the auditors' warning came as no surprise.
"Their cash flow is going one way and their interest expenses are rising," said analyst Jim Gentrup, of Provident Equity Research. "They're just drowning in debt. They recognize it, though. It's not like Donald is standing still. He's doing something about it."