Camden, NV: A commercial contract dispute has erupted between a New York City developer and the current owners of the Trump Marina Casino Hotel in Atlantic City. The former is attempting to get back a $17 million deposit that Coastal Marina LLC/Coastal Development LLC had paid when it agreed last year to buy the property that carries the famous Trump name.
The chief executive officer of Trump Entertainment, in a story appearing today in the Philadelphia Inquirer, maintained that Trump Entertainment gets to keep the deposit because Coastal failed to close the deal after it agreed to the purchase in May, 2008.
"It is automatically forfeited," Trump CEO Mark Juliano said in a statement to the media. "It was very specific in the language of our purchase agreement - $17 million becomes ours if they didn't close."
According to the Inquirer account the Trump Marina Casino is part of three-property Atlantic City casino complex. Coastal had planned to acquire Trump Marina Casino and convert it into a Margaritaville-themed casino.
The New York-based developer had entered into an agreement to buy the property on May 28 of last year and had submitted a deposit to the owners of $17 million, based on a purchase price of $316 million that was later reduced to $270 million. It was reported that Coastal was later granted an extension on the original deadline and the transaction was to close on May 28th of this year—exactly one year after the initial agreement.
However, according to the Inquirer talks broke down between the two sides just prior to the extended deadline.
Coastal now accuses Trump Entertainment of failing to adequately maintain the property and diverting customers from Trump Marina to the other two accompanying Trump casino properties—Trump Taj Mahal and Trump Plaza.
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Each accuses the other of breach of contract.
"Unbeknownst to the Coastal parties, the defendants intended to strip the casino of its valuable customers and key personnel, destroy the 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," Coastal claims in the lawsuit, filed in U.S. Bankruptcy Court in Camden.
"It's a classic case of buyer's remorse," Trump Entertainment's Juliano said yesterday. "Everything we were required to do according to the purchase agreement we did."
The commercial contract dispute continues.