ATLANTIC CITY, N.J. (CBSNewYork/AP) -- Trump Entertainment Resorts filed for bankruptcy Tuesday and threatened to shut down the Taj Mahal Casino Resort, which would make it the fifth Atlantic City casino to close this year.
The company owns Trump Plaza, which is closing in a week, and the Taj Mahal, which has been experiencing cash-flow problems and had been trying to stave off a default with its lenders.
The company said the Taj Mahal could close Nov. 13 if it doesn't win salary concessions from union workers.
It's the fourth such filing for the struggling casino company or its corporate predecessors.
The company filed in U.S. Bankruptcy Court in Wilmington, Delaware, saying it has liabilities of between $100 million and $500 million, and assets of no more than $50,000. It missed its quarterly tax payment due last month and says it doesn't have the cash to make an interest payment to lenders due at the end of the month.
It also says both its Internet gambling partners have taken steps to end their contracts with Trump Entertainment.
It said cost-cutting negotiations with the main casino workers' union have stalled, and that the company is preparing notices warning employees the Taj Mahal may close on Nov. 13.
"Absent expense reductions, particularly concessions from their unions, the debtors expect that the Taj Mahal will close on or shortly after November 13, 2014 and that all operating units will be terminated between November 13, 2014 and November 27, 2014,'' the company wrote in its bankruptcy filing.
If the company makes good on its threat to close the Taj Mahal, it would further rock an already shell-shocked casino market in what just a few years ago was the nation's second-largest gambling market after Nevada. Now, New Jersey has fallen behind Pennsylvania.
Three other Atlantic City casinos have closed this year, as the industry struggles with competition in nearby states, CBS 2's Dick Brennan reported.
"The industry, the gambling industry, the casino industry has cannibalized itself. So man are popping up that it's cutting profits at all of them, and it's cutting into their business, so they're their own worst enemy at this point," Erik Engquist, Crain's New York Business, explained.
The filing comes as a shock to a city that is reeling from a collapsing casino market.
"This one is a surprise because we used to come her 10, 15 years ago and it was busy, buys, and we walked in there today and there was hardly anybody there," Linda Armstrong said.
Atlantic City began the year with 12 casinos, but could end it with seven if the Taj Mahal closes. So far this year, the Atlantic Club, Showboat and Revel have gone out of business, with Trump Plaza closing next Tuesday.
The bankruptcy filing came a day after Gov. Chris Christie's administration told the state's casinos and horse tracks that they can legally offer sports betting -- a move that defies a federal ban on it and is sure to be challenged in court by the professional and amateur sports leagues which have fought it thus far.
The governor said sports betting is legal under previous federal rulings as long as none of the wagers involve a collegiate game played in New Jersey or a New Jersey college team elsewhere in the country.
"I'm telling people book your rooms now in Atlantic City for the Super Bowl because it's going to be packed," state Sen. Raymond Lesniak, one of the Legislature's strongest supporters of sports betting, told WCBS 880.
The Governor is pushing to turn the town into a destination resort area.
"We all have to stop defining Atlantic City purely by 'could it sustain 12 casinos or not.' There's not a place outside Las Vegas that can do that," he said.
Turning Atlantic City into a tourist mecca would require an influx of cash.
"Can Atlantic City be re-characterized, reconstituted as a family entertainment venue? That would be a long shot and would require some very brave investors, and I'm not sure that anyone's gonna put up the money to do that," Engquist said.
Trump Entertainment has struggled since the day it emerged from its last bankruptcy in 2010, having filed the year before. It came out of bankruptcy with $350 million in debt, and currently has more than $285 million in debt.
As of the end of July, the company employed 2,800 people.
The company has been trying to reduce expenses and debt, including selling its former Trump Marina casino for $38 million to Landry's Inc., which now runs it as the Golden Nugget Atlantic City. It also sold the Steel Pier for $4.5 million; a warehouse for $1.9 million, and its former corporate offices in a converted firehouse for $3.1 million. That building now houses the Casino Reinvestment Development Authority.
It has been trying for years to sell Trump Plaza. A deal to sell it to a California firm for $20 million last year fell through.
The company also said it has been in negotiations with Local 54 of the Unite-HERE union on cost-cutting measures it says it needs to survive, but that the union has rejected them. Bob McDevitt, the union president, could not immediately be reached for comment.
The concessions would be on top of a separate $4 million round of union concessions the company won in 2011.
Donald Trump owns a 10 percent stake in the firm, but no longer controls it. He is suing the company to remove his name from the properties, which he says have fallen into disrepair and do not meet agreed-upon standards of quality and luxury.
If the Taj Mahal closes, Trump Entertainment would have no remaining properties and would presumably go out of business.
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