Trump Hotels Plans To Seek Bankruptcy

Where our decade hasn't ended! Celebrate the Music, Culture, and Memories of our current times.
User avatar
CVX
Posts: 722
Joined: Wed Aug 04, 2004 12:00 pm

Trump Hotels Plans To Seek Bankruptcy

Post by CVX »

Trump in Casino Debt Deal

By Peter Henderson

LOS ANGELES (Reuters) - Trump Hotels & Casino Resorts Inc. (NYSE:DJT - news) on Monday said key bond holders had agreed to take the company into voluntary bankruptcy and restructure its $1.8 billion in debt to get a $400 million capital infusion.

Donald Trump, the real estate developer and star of reality show "The Apprentice" appeared poised to use his trademark line "You're fired!" on himself as chief executive and to cut his controlling stake to 25 percent if the deal with debt holders and a Credit Suisse First Boston equity fund goes through.

More:

http://news.yahoo.com/news?tmpl=story&c ... &printer=1
User avatar
CVX
Posts: 722
Joined: Wed Aug 04, 2004 12:00 pm

Trump Hotels Plans To Seek Bankruptcy

Post by CVX »

Trump sees bankruptcy as a plus





BY LORE CROGHAN

DAILY NEWS BUSINESS WRITER





Donald Trump's Atlantic City empire includes the Trump Taj Mahal.



The casino company that bears Donald Trump's 24-karat name is heading for bankruptcy next month - but Trump sees no shame in it.

"It doesn't matter - it's a modern-day thing, a legal mechanism," he told the Daily News.

Instead, Trump said he's "really happy" with the restructuring agreement Trump Hotels & Casino Resorts has made with its largest group of bondholders, which paves the way for a $345 million investment from Credit Suisse First Boston.

The plan will be carried out through a pre-negotiated Chapter 11 proceeding.

A hefty $1.8 billion in debt will be cut by $544 million, and the interest rate on it will drop to 7.875% from about 12% - putting Trump Hotels on an equal footing with competitors. It will get a $500 million line of credit to renovate aging Atlantic City properties, build a new tower at Trump Taj Mahal and expand to Las Vegas.

"It becomes a whole different company," Trump said.

Analysts said the deal that's been crafted is potent enough medicine to heal cash-starved Trump Hotels.

It's never turned a profit in its eight years as a public company, and has struggled to make prohibitive debt payments.

"This removes the sword of Damocles that was hanging over the company," said Sean Egan of Egan-Jones Ratings, a bond ratings firm.

As part of the restructuring, Trump himself is investing $55 million in cash - which he said was his idea, rather than a demand by Credit Suisse or the bondholders.

Though his title will be chairman instead of chief executive, and his ownership stake will be 25% instead of 56%, the star of "The Apprentice" will stay involved in Trump Hotels - and be paid an annual salary of $2 million.

He'll oversee development projects, and deal with government officials in new markets the company enters.

"It was extremely important that he be incentivized to work with us," said excecutive vice president Scott Butera, who's in charge of the restructuring.

Return to “Our Current Decade”