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CAMDEN - Donald Trump and corporate bondholders are gearing up for the second and decisive round in a bankruptcy brawl for control of three financially ailing Atlantic City casinos.

Four months after bondholders rejected Trump's offer to buy the company and take it private, both sides were in bankruptcy court Tuesday pitching competing plans to save Trump Entertainment Resorts Inc.

Trump Entertainment's board of directors is expected to pick one of the proposals within 45 days. Critical to the company's survival is the restructuring of its enormous debt - about $1.7 billion worth, including $1.25 billion in bonds.

"We're looking for a plan that represents the opportunity to have an appropriate balance sheet and allows the company to generate enough cash to support its leverage, which it hasn't been able to do in the past," Trump Entertainment Chief Executive Officer Mark Juliano said.

Trump is teaming up with Dallas-based Beal Bank to try to buy the company and take it private. But details of the Trump proposal remain confidential. Bondholders also are keeping their plan under wraps while it is being considered by Trump Entertainment's board.

On Tuesday, a U.S. Bankruptcy Court judge in Camden gave the company an extra 45 days to weigh the competing plans, but Juliano insisted it shouldn't take that long to decide.

"Obviously, there will be one plan that the company will support," he said.

Attorneys for the bondholders declined to comment. Neither Trump nor his celebrity daughter, Ivanka, would comment. Ivanka Trump joined her father in resigning from the Trump Entertainment board of directors in February following the fallout then with bondholders.

This is the third trip through bankruptcy for the Trump casinos since the early 1990s. The financial crisis confronting the company now is similar to the previous bouts with bankruptcy: too much debt and too little casino cash flow to pay it off.

But this time around, Trump himself is no longer part of the company. Formerly Trump Entertainment's chairman, his resignation from the board made him an outsider, even though the casinos still carry his name. Now he wants back in.

With the 45-day extension granted Tuesday, Trump Entertainment has until Aug. 3 to make its decision whether to go with Trump or the bondholders. The same date is the deadline for the company to file its plan of reorganization showing how it will restructure its debts and emerge from Chapter 11 bankruptcy protection.

Trump Entertainment operates Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino. Recent attempts to sell Trump Marina for $270 million to a New York gaming group fell through, meaning that the company is stuck with the habitually underperforming casino for now.

"Our long-term business plan is to find a buyer for the Marina," Juliano said.

E-mail Donald Wittkowski:

DWittkowski@pressofac.com

1 comment:

• American_Gaming_Guru (112) posts 9:48 am

  It looks to me that the bondholders have the upper-hand here in terms of a financial position just as the Icahn team did with the Trop. The only advantage that Trump has is that his likeness is currently tied to the allure of the Taj, Plaza and Marina. I am not sure how the Plaza or Marina would do simply as The Plaza or The Marina. With that said, bondholders would need to re-theme them and undoubtedly pour some money into them to bring them up to a competitive position in the market. Oh and Trump hired Juliano and appointed most of the board positions...right? This is going to be very interesting.

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