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Coastal Sues Trump Over Atlantic City Casino Deal

July 29th, 2009

In June the deal was nixed to transform Trump Marina Casino in Atlantic City into a Margaritaville themed casino resort and now Coastal Development LLC is suing Trump Entertainment Resorts:

Donald Trump, who has carefully cultivated an image for quality and opulence, ran at least one of his casino properties like a fleabag hotel.

Then, he tried to unloaded it on one of his protégés and singer Jimmy Buffett, even though it needed a reported $50 million in repairs to bring it up to standard.

The assertions are contained in a lawsuit filed as part of bankruptcy proceedings involving Trump’s Atlantic City casinos. Trump, who was ousted when the properties fell into bankruptcy under a heavy debt load, is attempting regain control of his casino empire.

But the company that was slated to buy the Trump Marina Hotel Casino, claims in the $17 million lawsuit that holding company Trump Entertainment Resorts essentially slummed the property by withholding maintenance and repairs when Trump was in charge. Instead of fixing leaky windows and skylights, for example, the casino put plants underneath them to catch the drips.

The suit also claims Trump Entertainment deliberately tried to hid its financial condition to try to salvage the deal. Coastal agreed to pay $316 million for the casino, and intended to partner with singer Buffett to take advantage of the singer’s popular “Margaritaville” restaurants and bars.

“Unbeknownst to the Coastal parties, the defendants intended to strip the casino of its valuable customers and key personnel, destroy its image with its potential and current patrons, and let the casino fall into a complete state of disrepair such that no lender would ever finance its purchase,” the lawsuit states.

Although Trump Entertainment promised to make repairs, little, if any, of the promised work was done. Beside leaking winds, the casino had inoperable air conditioning units; wind and weather damage at the building’s Crystal Tower, and kitchen equipment that has been removed, court papers state.

Read the full article here.

Tagged in Business Empire, Casinos