Some Real Estate Developers Use Bankruptcies and "Corporate Restructuring" as Modi Operandi For Modern Times
Writing in the blog Lienrock.com (July 22, 2014), columnist Eric Hawthorn commented on the imminent closing in Atlantic City of Trump Entertainment Resorts' Trump Plaza hotel and casino. Apparently investor Carl Ichan has derailed, for the time being at least, sale of the hotel at a record discount of $20 million.
This is yet another example of the beating Atlantic City and its storied Board Walk have taken in recent years as a result of not only Hurricane Katrina but economic recession and changing consumer holiday preferences as well.
Need for a new paradigm
While we hope for the best for the future of Atlantic City, the city's situation as a whole suggests the need for freshened energy and imagination. In responding to Hawthorn's article, this writer commented on the considerable survival capabilities of real estate Developers and Investors confronted with problems not unlike those of so many other small investors caught up in the 'troubles' of the last seven years.–
It is a sad commentary indeed that in an era that saw banks and lenders effectively defrauding the public and investors alike and walking away unscathed, that “big time” real estate investors and developers like Trump can engage in serial bankruptcies without sanction let alone even embarrassment. These days it’s called “repositioning” one’s assets.
Meanwhile individual savers and investors, in real estate as well as securities, struggle to regain some semblance of the wealth lost in the “market correction” of 2008/2009. The markets percolate with renewed energy while municipalities like Atlantic City (and Detroit, of course) continue their slide.
Time for a bit of Social Enterprise here… What is needed is investors and builders that take the “long view”, not speculators ready to abandon ship at the first scent of stormy weather.
- Philip Elmes
For Eric Hawthorn's response (click here)