ATLANTIC CITY - Donald Trump is offering to pay bondholders an extra $13.9 million in cash in hopes of regaining control of the bankrupt casinos that he no longer owns but still bear his name.
Bondholders, however, have made their own move to buy the company, increasing their offer from $175 million to $225 million in a bidding war with the celebrity CEO and star of the NBC reality show "The Apprentice."
U.S. Bankruptcy Court Judge Judith H. Wizmur learned details of the competing offers for Trump Entertainment Resorts Inc. during a hearing Wednesday in Camden. She scheduled Jan. 20 as the first of five possible days of hearings to select the best plan to help the company emerge from Chapter 11 bankruptcy protection.
By scheduling the hearings so far in the distance, Wizmur is giving both sides plenty of time to work out a deal instead of forcing her to pick one plan over another and possibly igniting all-new litigation that could drag out the bankruptcy for months.
"We're never adverse to having conversations," Trump's daughter, Ivanka, said of negotiations with bondholders.
Trump has teamed up with Texas banker and high-stakes poker player Andy Beal to regain control of the casinos eight months after he resigned as company chairman in a dispute with bondholders. Ivanka Trump, who is part of the buyout plan, joined her father in resigning from Trump Entertainment's board of directors in February.
Under Trump's plan, he and Beal Bank would invest $100 million in the company. Originally, Trump proposed to pay Trump Entertainment bondholders nothing for their $1.25 billion of notes, but he has sweetened the deal to include $13.9 million in cash.
"We feel very good about our plan, but this is a long process," Ivanka Trump said. "I'm not predicting the future, although we continue to feel very good about our plan and that it is supported by the company."
Prior to Wednesday, Trump and bondholders had been in high-level talks to try to reach a settlement. Attorneys told Wizmur that Trump had held "a summit" with bondholders to narrow their differences. In the meantime, negotiations are expected to continue.
"We have, all along the way, continued to talk to see if there is a consensual agreement that can be arrived at. That will continue as the process moves forward," said Mark Juliano, chief executive officer of Trump Entertainment.
Trump Entertainment is backing the Trump-Beal buyout plan. Juliano characterized the Trump-Beal deal as superior to the bondholders' offer because it would give the company $100 million in fresh cash for casino upgrades and growth opportunities. The bondholders, on the other hand, are concentrating on paying down the company's debt.
"I think our plan gives the greatest platform for growth," Ivanka Trump said.
Kristopher M. Hansen, a New York attorney representing bondholders, could not be reached for comment.
In addition to upping their bid to $225 million, the bondholders are no longer making their offer contingent on the sale of the struggling Trump Marina Hotel Casino. Originally, they had planned to finance part of their deal by selling Trump Marina for $75 million to Coastal Marina LLC, a New York gaming group that failed earlier this year to buy the property from Trump Entertainment for $270 million.
Now, the bondholders say Trump Marina's sale won't be a requirement if they are successful in buying the company, Juliano said.
Trump Marina, Trump Plaza Hotel and Casino and the flagship Trump Taj Mahal Casino Resort are going through their third trip through bankruptcy since the early 1990s. They are struggling because of their heavy debt and declining revenue due to the recession and fierce competition from Pennsylvania slot parlors.
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