PHILADELPHIA, (Reuters):
DONALD TRUMP'S casino operations filed for bankruptcy on Sunday in a long-expected move that would allow the real estate maverick to restructure the company's debt and overhaul its aging casinos.
Trump, the developer who flaunts his brusque business style on 'The Apprentice' reality television show, last month clinched a restructuring pact with bondholders that would cut his stake in the company but preserved his role as chairman and chief executive.
Under the voluntary bankruptcy filing, Trump Atlantic City Associates, which is 99 per cent owned by Trump Hotels and Casino Resorts Inc., listed US$1.3 billion in debt and $1.5 million in assets. It marks the second bankruptcy for Trump's casino empire.
Trump's major casinos in New Jersey Trump Taj Mahal, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino have suffered from competition from the Borgata Hotel Casino and Spa, which opened last year.
The Chapter 11 bankruptcy case was filed with the U.S. Bankruptcy Court for the District of New Jersey.
In 1992, Trump's Atlantic City casinos filed for Chapter 11 after buckling under the weight of US$1 billion in debt. He later regained control of those properties.
BANKHOLDERS' STAKES
Bear Stearns, Bank of New York Co., J.P. Morgan Chase and Co. and Goldman Sachs Group Inc. are among the largest creditors, according to the bankruptcy filing. These and other bondholders held stakes in first mortgage notes due 2006, according to the filing.
The restructuring plan forged last month calls for the bondholders to own about two-thirds of the company. Trump's stake would shrink to about 27 per cent from 56 per cent.
Morgan Stanley agreed to provide a US$500 million line of credit, which will be used to renovate and upgrade the casinos and push into new markets. Beal Bank committed to US$100 million in interim financing.
The company also owns a riverboat casino in Gary, Indiana, called the Trump Casino Hotel, and manages a casino in California owned by Native Americans. It has said it aims to break into new markets, such as Pennsylvania and Las Vegas.
