Resorts International was a hotel and casino company. From its origins as a paint company, it moved into the resort business in the 1960s with the development of
Paradise Island
Paradise Island is an island in the Bahamas formerly known as Hog Island. The island, with an area of (2.8 km2/1.1 sq mi), is just off the shore of the city of Nassau, which is itself on the northern edge of the island of New Providence ...
in the
Bahamas
The Bahamas, officially the Commonwealth of The Bahamas, is an archipelagic and island country within the Lucayan Archipelago of the Atlantic Ocean. It contains 97 per cent of the archipelago's land area and 88 per cent of its population. ...
, and then expanded to
Atlantic City, New Jersey
Atlantic City, sometimes referred to by its initials A.C., is a Jersey Shore seaside resort city (New Jersey), city in Atlantic County, New Jersey, Atlantic County, in the U.S. state of New Jersey.
Atlantic City comprises the second half of ...
with the opening of
Resorts Casino Hotel
Resorts Casino Hotel is a hotel and casino in Atlantic City, New Jersey. Resorts brought gaming to Atlantic City in 1978 as the first American casino outside Nevada when it opened in 1978. The resort completed an expansion in 2004, adding the ...
in 1978. After the death of its longtime chairman, James Crosby, in 1986, the company was briefly controlled by
Donald Trump
Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who is the 47th president of the United States. A member of the Republican Party (United States), Republican Party, he served as the 45 ...
, before being acquired by
Merv Griffin
Mervyn Edward Griffin Jr. (July 6, 1925 – August 12, 2007) was an American television show host and media mogul. He began his career as a radio and big band singer, later appearing in film and on Broadway theatre, Broadway. From 1962 to 1986, G ...
in 1988. It was acquired by
Sun International
Sun International is a South African gambling and hospitality company, founded by Sol Kerzner in 1967.
Sun International owns diverse assets, including the Sun City resort near Rustenburg, in the North West Province, and an online gambling ...
in 1996.
History
Development in Bahamas and Atlantic City (1958–1986)
In 1958, the Mary Carter Paint Company, a New Jersey paint manufacturer, was acquired by a group of investors.
The Mary Carter Paint Company, was widely considered to be a
CIA
The Central Intelligence Agency (CIA; ) is a civilian foreign intelligence service of the federal government of the United States tasked with advancing national security through collecting and analyzing intelligence from around the world and ...
front organization
A front organization is any entity set up by and controlled by another organization, such as intelligence agencies, organized crime groups, terrorist organizations, secret societies, banned organizations, religious or political groups, advocacy ...
that laundered payments to the Cuban exile army. James Crosby, son of one of the investors, was appointed to lead the company.
With its paint business on the decline, Mary Carter sought to diversify into the land development business.
It acquired 1,200 acres of land near
Freeport, Bahamas
Freeport is a city, district and free trade zone on the island of Grand Bahama in the northwest part of The Bahamas. In 1955, Wallace Groves, a Virginian financier with lumber interests in Grand Bahama, was granted of pineyard with substant ...
in 1962, followed by a 75 percent interest in
Paradise Island
Paradise Island is an island in the Bahamas formerly known as Hog Island. The island, with an area of (2.8 km2/1.1 sq mi), is just off the shore of the city of Nassau, which is itself on the northern edge of the island of New Providence ...
in 1966.
The company built a bridge to the island and developed it with hotels and restaurants, and opened the Paradise Island Casino there in 1967.
In 1968, Mary Carter sold its paint division and changed its name to Resorts International.
Other ventures that the company undertook were short-lived, including ownership of the
Biff Burger fast food chain from 1962 to 1976,
[ ] an investment in an experimental shrimp farm in Mexico in the early 1970s,
ownership of the
Marine World/Africa USA theme park in California from 1972 to 1979, and an aborted deal to purchase half of slot machine maker
Williams Electronics in 1978.
Crosby led Resorts on several forays into the airline industry over the years.
The company made efforts towards acquiring
Pan American World Airways
Pan American World Airways, originally founded as Pan American Airways and more commonly known as Pan Am, was an airline that was the principal and largest international air carrier and unofficial overseas flag carrier of the United States for ...
in 1969, but backed down after Congress intervened to make such a takeover more difficult. Resorts purchased
Chalk's International Airlines
Chalk's International Airlines, formerly Chalk's Ocean Airways, was an airline with its headquarters on the grounds of Fort Lauderdale-Hollywood International Airport in unincorporated Broward County, Florida near Fort Lauderdale. It operated ...
, a small airline offering seaplane service between Florida and the Bahamas, in 1974; the company would operate the airline until selling it in 1991.
Resorts executives traveled the world looking for potential casino sites.
Finally, Resorts took an interest in
Atlantic City, New Jersey
Atlantic City, sometimes referred to by its initials A.C., is a Jersey Shore seaside resort city (New Jersey), city in Atlantic County, New Jersey, Atlantic County, in the U.S. state of New Jersey.
Atlantic City comprises the second half of ...
in the lead-up to a 1976 voter referendum to allow casino gambling there.
The company purchased large tracts of land in the city, including the historic Chalfonte-Haddon Hall.
When the referendum passed, Resorts was prepared to quickly renovate the hotel, opening it in 1978 as the city's first casino,
Resorts International Casino Hotel.
The property was an immediate success, and the company saw its revenue increase from $59 million in 1977 to $407 million in 1979.
Resorts expanded its footprint in the Bahamas to a second casino in 1978, assuming management of El Casino in Freeport.
It sold the casino in 1983.
The company in 1983 began construction of the
Taj Mahal
The Taj Mahal ( ; ; ) is an ivory-white marble mausoleum on the right bank of the river Yamuna in Agra, Uttar Pradesh, India. It was commissioned in 1631 by the fifth Mughal Empire, Mughal emperor, Shah Jahan () to house the tomb of his belo ...
casino, adjacent to the Resorts International casino, with an estimated budget of $250 million.
The Resorts Casino Hotel had seen declining profits after 1979, as it faced competition from newly opened Atlantic City casinos, and a general slump in the casino industry.
The need to diversify was again apparent.
The company offered to purchase
Trans World Airlines
Trans World Airlines (TWA) was a major airline in the United States that operated from 1930 until it was acquired by American Airlines in 2001. It was formed as Transcontinental & Western Air to operate a route from New York City to Los Angeles ...
in 1985, but was rejected. Resorts then returned its focus to Pan Am, buying an 11 percent stake in the airline.
By early 1986, Resorts was reported to be exploring expansion options in West Virginia, Florida, and Louisiana, where it was participating in lobbying efforts to legalize gambling, and searching for potential casino sites.
Post-Crosby and Donald Trump era (1986–1988)
Crosby died unexpectedly in April 1986, and Resorts International became a takeover target. The Taj Mahal had encountered construction problems, and Crosby's heirs, lacking experience in large development projects, doubted their ability to complete it successfully. Real estate developer
Donald Trump
Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who is the 47th president of the United States. A member of the Republican Party (United States), Republican Party, he served as the 45 ...
, who owned two Atlantic City casinos, beat out several other bidders to purchase a controlling stake in the company from Crosby's family for $79 million in July 1987.
Trump was appointed chairman of Resorts International, and said he would complete the Taj Mahal in about a year.
As the Taj Mahal's budget had ballooned to $930 million, Resorts struggled to find the financing to complete it. With the company claiming to be near bankruptcy in early 1988, Trump made a
tender offer
In corporate finance, a tender offer is a type of public takeover bid. The tender offer is a public, open offer or invitation (usually announced in a newspaper advertisement) by a prospective acquirer to all stockholders of a publicly traded corp ...
to buy all outstanding stock for $22 a share, stating that he was willing to personally finance the construction, but only if he owned the entire company. Television producer
Merv Griffin
Mervyn Edward Griffin Jr. (July 6, 1925 – August 12, 2007) was an American television show host and media mogul. He began his career as a radio and big band singer, later appearing in film and on Broadway theatre, Broadway. From 1962 to 1986, G ...
made an unexpected offer to purchase the company for $35 a share, sparking a highly publicized takeover battle, with Trump and Griffin filing lawsuits against each other. The two ultimately reached a settlement, which was executed in November 1988, with Griffin purchasing the company for $365 million, and Trump purchasing the Taj Mahal from the company for $273 million.
Merv Griffin era (1988–1996)
Griffin's purchase was financed with high-interest
junk bonds
In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit even ...
sold by
Michael Milken
Michael Robert Milken (born July 4, 1946) is an American financier. He is known for his role in the development of the market for High-yield debt, high-yield bonds ("junk bonds"), and his conviction and sentence following a guilty plea on felony ...
.
Less than a year after Griffin's takeover, Resorts began defaulting on interest payments to bondholders, due to the company's high debt load and inability to sell undeveloped real estate assets. In 1989, Resorts entered
Chapter 11 bankruptcy protection
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, wh ...
.
Under a
prepackaged bankruptcy
Pre-packaged insolvency (a "pre-pack") is a kind of bankruptcy procedure, where a restructuring plan is agreed upon in advance of a company declaring its insolvency. In the United States pre-packs are often used in a Chapter 11 filing. In the Uni ...
plan, bondholders received 78 percent of the company's stock, in exchange for canceling $496 million in debt.
As part of the deal, Griffin also invested $25 million in cash, the company again became publicly traded, and the Paradise Island property was put up for sale.
Proceeds from the Paradise Island sale, expected to top $250 million, would have allowed Resorts to reduce its debt load to a level that could be serviced by cash flow from the Atlantic City property.
However, no serious offer over $150 million was received, leading the company to file Chapter 11 again in 1994.
The prepackaged bankruptcy plan reduced the company's debt by $289 million, and in exchange gave bondholders 40 percent of the reorganized company, plus proceeds from the sale of Paradise Island to South African
Sol Kerzner
Solomon 'Sol' Kerzner, (23 August 1935 – 21 March 2020) was a South African accountant and business magnate. He founded both of South Africa's largest hotel groups, the Southern Sun Hotel Group and Sun International. He was also the founder, ...
's hotel firm
Sun International
Sun International is a South African gambling and hospitality company, founded by Sol Kerzner in 1967.
Sun International owns diverse assets, including the Sun City resort near Rustenburg, in the North West Province, and an online gambling ...
.
The company changed its name to Griffin Gaming & Entertainment in 1995.
Griffin hoped the new name would emphasize his connection to show business, as the company sought to expand into television and live entertainment.
Griffin Gaming announced plans in March 1996 to build a new casino hotel next to Resorts.
In December 1996, Sun International purchased the company for $293 million in stock and assumed debt. Sun hoped the acquisition would gain it quick access to the burgeoning Atlantic City casino market, and that Griffin's land holdings would provide a foundation for Sun's previously announced plan to build an $800-million casino on the Boardwalk. The Griffin corporate entity became Sun International North America, and Sun's interests in the
Mohegan Sun
Mohegan Sun is a large casino and entertainment complex located on 240 acres (97 ha) of the Mohegan Indian Reservation in Uncasville, Connecticut, along the banks of the Thames River (Connecticut), Thames River. It is owned and operated by the fe ...
casino were folded into it.
Colony Capital
DigitalBridge Group, Inc. is a global digital infrastructure investment firm. The company owns, invests in and operates businesses such as cell towers, data centers, fiber, small cells, and edge infrastructure. Headquartered in Boca Raton, Digita ...
, which had purchased Resorts Atlantic City in 2001, revived the Resorts International name in 2005, forming an affiliate company named
Resorts International Holdings
Resorts International Holdings, LLC (RIH), also known as Colony Resorts Holdings (CRH) was an affiliate of Colony NorthStar based in Las Vegas, Nevada.
As of 2005, they were the fifth largest gaming company in America under Nick Ribis.
RIH was c ...
. The Resorts brand would be attached to two of the company's other casinos,
Resorts Tunica and
Resorts East Chicago.
Intertel
International Intelligence Inc., commonly known as Intertel, was a private security firm majority-owned by Resorts International. Resorts financed the establishment of Intertel in 1970, as an outgrowth of Crosby's efforts to keep the company's Bahamas casino free of
organized crime
Organized crime is a category of transnational organized crime, transnational, national, or local group of centralized enterprises run to engage in illegal activity, most commonly for profit. While organized crime is generally thought of as a f ...
influence.
Intertel was responsible for security at Resorts properties, and offered its services to other hotels and large corporations.
Its other high-profile work included providing security for
Howard Hughes
Howard Robard Hughes Jr. (December 24, 1905 – April 5, 1976) was an American Aerospace engineering, aerospace engineer, business magnate, film producer, and investor. He was The World's Billionaires, one of the richest and most influential peo ...
, investigating the
Chicago Tylenol murders
The Chicago Tylenol murders were a series of poisoning deaths resulting from drug tampering in the Chicago metropolitan area in 1982. The victims consumed Tylenol-branded acetaminophen (paracetamol) capsules that had been laced with potassium ...
and the
Bhopal disaster
On 3 December 1984, over 500,000 people in the vicinity of the Union Carbide India Limited pesticide plant in Bhopal, Madhya Pradesh, India were exposed to the highly toxic gas methyl isocyanate, in what is considered the world's worst ind ...
, and arranging safe passage to the Bahamas for the
Shah of Iran
The monarchs of Iran ruled for over two and a half millennia, beginning as early as the 7th century BC and enduring until the 20th century AD. The earliest Iranian king is generally considered to have been either Deioces of the Median dynasty () ...
and deposed Nicaraguan dictator
Anastasio Somoza.
References
{{reflist, 30em
Gambling companies of the United States
Hospitality companies of the United States
Defunct gambling companies
Gambling companies established in 1958
Gambling companies disestablished in 1996
1958 establishments in New Jersey