In 1996, Trump Hotels
The company lumbers under $1.8 billion in long-term debt, which works out to a ratio of debt to capital in the area of 331 to 1. The company says, "Management believes that this indebtedness and associated interest expense hinders the Company's ability to reinvest in the maintenance of its owned properties at desired levels."
Yikes. When you have suffered operating losses for the last three years and you can't do maintenance, especially in an image business like gaming, you are in trouble.
Making matters worse, the $1 billion MGM Mirage
The list of threats goes on and on -- from neighboring states approving gaming and slots to customers not driving because of higher gasoline prices.
Trump Hotels has a $73.1 million interest payment due May 1. The company says that it "cannot ensure that it will have sufficient funds on hand to make the interest payment within the 30-day grace period." Trump's auditor issued a "going concern" warning, and Moody's
The white knight in Trump's future is an affiliate of Credit Suisse Group
Fool contributor W.D. Crotty remembers the old Rule Breaker Portfolio shorting Trump in 1997 at $8.50 and then covering 2 1/2 years later at $4.87 for a 42.7% profit, but he does not own stock in any of the companies mentioned.