No More Trump Cards

Back in February, debt-ladenTrump Hotels & Casino Resorts (NYSE: DJT  ) entered an agreement with a subsidiary of Credit Suisse (NYSE: CSR  ) for a $400 million recapitalization, which was conditional on Trump's ability to refinance its $1.8 billion worth of debt. Negotiations to do so are still ongoing. In the meantime, the company has at least temporarily avoided bankruptcy.

Yesterday, Trump Hotels announced that it had made a $73.1 million interest payment -- a payment that was due May 1, though the company had a 30-day grace period. If it hadn't done so, the casino operator could have been forced into bankruptcy.

So the company has dodged a bullet, for now. However, Trump's survival may be contingent on the $400 million bailout from DLJ Merchant Banking, Credit Suisse's private equity arm. Under the terms of that deal, Donald Trump would see his ownership stake reduced from 56% to 20%. Trump would also step down as CEO but remain chairman.

And the company needs the cash badly just to compete.

In addition to a small riverboat in the Chicagoland market, Trump Hotels owns three properties in Atlantic City, which require cash for renovation and expansion that the company hasn't had available. Its losses are piling up, with its properties facing stiff competition from MGM Mirage (NYSE: MGG  ) and Boyd Gaming's (NYSE: BYD  ) new Borgata casino opened last summer, and newly renovated properties owned by Harrah's Entertainment (NYSE: HET  ) and Caesars Entertainment (NYSE: CZR  ) . At the same time, the prospects for gaming in neighboring states mean even more rats in the race.

Trump most likely will find a way to obtain the cash infusion and survive. But that doesn't necessarily make Trump a good bet. In the face of increasing competition, survival in no way translates directly to success.

Fool contributor Jeff Hwang owns none of the companies mentioned above.