Donald Trump aims to retake control of casinos - Thursday 18th of June 2009
As the casino company that bore his name sank deeper and deeper into the red this year, Donald Trump went head to head with bondholders trying to buy it and take it private - and lost.
Now the real estate mogul, whose distaste for losing is legendary, is back in the ring and pushing a plan to buy Trump Entertainment Resorts out of bankruptcy.
To succeed, hell have to beat out a competing offer advanced by the bondholders.
The three Atlantic City casinos owned by Trump Entertainment still bear his name, but thats the extent of Donald Trumps involvement with them right now. He had to relinquish day-to-day control of the company following a 2004 bankruptcy - the second of three the company would file.
When his offer to buy the company and take it private was spurned in February by board members allied with bondholders, Trump resigned as chairman, saying his stock was now "worthless to me." His daughter, Ivanka, also resigned from the companys board.
Mark Juliano, the companys CEO, said today that the board will weigh the two competing offers for the company and does not plan to formulate one of its own.
Neither plan has been filed with the court so the terms of both remain confidential.
Donald Trumps offer is in partnership with Dallas-based Beal Bank, run by Andy Beal, a close friend.
Juliano would not comment in detail on either proposal, other than to say both seek to reduce the companys debt to levels that can be supported by its reduced cash flow.
He would not specify a target number for the debt level beyond saying it is below the current $1.7 billion.
"Were 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 hasnt been able to do in the past," Juliano said.
Two past Trump bankruptcy reorganizations have failed largely because they did not eliminate enough debt to make the company competitive in the cutthroat Atlantic City market. That competition is more fierce now than ever with slots parlors in Pennsylvania and New York draining away loyal customers and revenue.
For the first five months of this year, Atlantic City casino winnings are down 15.7 percent.
Neither Donald Trump nor Erez Gilad, an attorney for the bondholders, immediately returned messages seeking comment.
Today a bankruptcy court judge gave the company an extra 45 days to consider the plans, but Juliano predicted it would not take that long to decide on one.
Juliano also said there are no current offers to buy Trump Marina Hotel Casino. A deal to sell the struggling gambling hall to Richard Fields, a New York developer who was once a protege of Donald Trump, fell through this month.
He said both purchase plans submitted to the Trump Entertainment board envision the company having three casinos in Atlantic City.
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