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BY JOHN CURRAN
Associated Press Writer | Wednesday, April 06, 2005 | (No comments posted.)
ATLANTIC CITY, N.J. | Like a gambler with a fresh bankroll, Donald Trump's casino company hopes to soon be back in the game, pumping money into its Atlantic City properties and looking to neighboring Pennsylvania for possible expansion after a judge approved its bankruptcy reorganization plan on Tuesday.
U.S. Bankruptcy Judge Judith Wizmur approved the reorganization of Trump Hotels & Casino Resorts, calling the plan to give bondholders majority control of the company fair and feasible.
In 30 days, the company will formally emerge from bankruptcy court protection with a new name, a new board of directors and a stronger position in the highly competitive Atlantic City casino market.
Buoyed by a $500 million line of credit and relieved of $98 million in annual interest payments, the reorganized company is expected to move quickly to build a 1,300-room tower at Trump Taj Mahal and refurbish the aging Trump Plaza and Trump Marina casinos, which have gone without significant improvements in recent years. They have paid the price for it, losing customers and cash to the Borgata Hotel Casino & Spa and other rivals.
"The excuses of yesteryear are behind us," said Trump Hotels President Scott Butera after Wizmur confirmed the plan following a 45-minute court hearing. Trump did not attend.
Trump, star of TV's "The Apprentice," said later he was happy the process went so smoothly.
"It'll be a fine company that is, for the first time, deleveraged," Trump said. "It was a question of junk bonds and a lot of debt. We've taken care of that."
Until last week, the plan's confirmation process was shaping up as a bitter battle pitting Trump and his bondholders against a group of dissident Trump Hotels shareholders who opposed the reorganization, calling it "a basket of goodies" for Trump himself.
But the company reached agreement with the shareholders March 28, agreeing to pay $17.5 million and let the investors share in the proceeds of the sale of the vacant Boardwalk parcel where the Trump World's Fair casino once stood.
That, combined with voting by bondholders who overwhelmingly approved the reorganization, paved the way for Tuesday's confirmation hearing. Lawyers for the Internal Revenue Service, the New Jersey Division of Taxation and DLJ Merchant Banking, which had opposed the confirmation because of outstanding claims, agreed to withdraw their opposition. They continue to pursue their claims.
Trump, who blames high interest payments -- not bad management -- for the bankruptcy, said the company is considering a move into Pennsylvania, which last year approved slot machine gambling.
Michael Walsh, an attorney for noteholders carrying $1.3 billion in Trump Atlantic City bonds, said the company's existing management would remain in place but that the choice of CEO would be left to the board. Trump said he himself would be CEO.
Trump will be chairman of the board of the new company, to be called Trump Entertainment Resorts Inc., with a $2 million-a-year salary and a 30 percent ownership stake.
Trump, who owns 56 percent of Trump Hotels, will still be the largest single stockholder and will oversee a new nine-person board of directors, five of which were chosen by bondholders.
What's next?
Casino regulators in New Jersey and Indiana still must sign off on the deal. The company will formally emerge from bankruptcy May 2, according to Trump Hotels President Scott Butera.
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