Trump set to regain control of his casino empire
August 5, 2009
Donald Trump appears to have bested a rival group of bondholders to regain control of the casinos that bear his name.
Trump Entertainment Resorts, which is operating under Chapter 11 protection from its creditors, has chosen a $100 million buyout offer from the Deal-meister and his financing partner, Dallas-based Beal Bank, over a bondholders’ plan, according to a report in The Press of Atlantic City. The offer will allow Trump to take the company private as it reorganizes its finances in U.S. Bankruptcy Court. The offer, however, is contingent on the bankruptcy judge’s approval and can still be contested by the company’s creditors.
Holders of $1.25 billion of Trump corporate bonds will receive nothing under the new plan, if it is approved. The shareholders also will be left high and dry. Beal Bank, however, which is headed by Andy Beal, a friend of Trump’s, holds a loan of nearly $500 million on Trump Entertainment casinos, and that debt will be restructured, according to The Press.
“I am pleased that the reorganization affords me an opportunity to make a new investment and help revive a company that has borne my name but not performed to my standards or been under my management,” Trump said in a statement cited by the newspaper.
“We’re excited, and the employees are excited to have Donald back and involved in really helping to market the company,” said Mark Juliano, CEO of Trump Entertainment. “They have a lot of enthusiasm for the new capital structure, but also in taking advantage of the Trump brand.”
This is the third sojourn in federal bankruptcy court for Trump’s casinos. Beal figured prominently in the second of those, in 2005, lending the company $100 million to pay its bills while it restructured.
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