Real Insight. Real Estate.

Hand over the keys?  More like hand over your chips, Mr. Trump. Andy Beal, head of Beal Bank, called the Donald’s bluff as he feigned interest last week in a joint venture with Beal to buy Trump Entertainment Resorts, the parent company of the troubled Atlantic City casinos Trump Taj Mahal, Trump Plaza and Trump Marina.  After filing for bankruptcy protection for the third time in his overstated real estate career in December 2007, Trump and daughter/business partner Ivanka withdrew their position.

That leaves Beal Bank, who lent the company $486 million dollars and was the most senior and secured lender, in a position to essentially convert the debt into a majority equity stake.  Beal, who is already famous as both a banker, and a poker player (After winning some medium-stakes games at the Bellagio, he got a rush and quickly upped his stakes to any amount an opponent would venture. He challenged some of the most successful players in the game to heads-up play, often coming out on top. He was so successfult hat poker legend Doyle Brunson created a consortium of top players, dubbing them “The Corporation,” to face Beal’s seemingly bottomless bankroll. Millions were won and lost by both sides, and these games became legendary) is combining his business savvy with his competitive passion to take a major stake in the ailing Atlantic City casino market.

“After Mr. Trump’s announcement, Beal Bank re-evaluated the posture of these cases, with a focus on maximizing its recovery, minimizing the litigation associated with the plan confirmation process and properly recognizing the stated interests of other stakeholders,” Beal Bank’s attorneys said in a court filing. “Simply, Beal Bank has offered to completely equitize its debt, which will permit the debtors to exit Chapter 11 debt-free.”

A hearing is set for today with a New Jersey bankruptcy judge.

Beal has made his $4.5 billion dollar fortune largely on betting on distressed assets when everyone else in the marketplace was shying away from them.  Atlantic City’s gaming industry has cratered because of the recession and pressure from neighboring states.  Delaware and Pennsylvania have plans to offer table games in addition to slot machines.  Pennsylvania’s slot parlor revenue jumped 32% from a year earlier to $177.1 million inOctober, while Atlantic City’s fell 6.5% to $323.8 million.  Clearly, Beal is making a huge bet that Atlantic City’s casinos will rebound.  But, as any avid poker player will tell you, “you can’t win what you don’t put in the middle.”

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