Trump plan prevails for A.C. casinos

ATLANTIC CITY - Investors in the three Trump casinos in Atlantic City are taking the reins of the struggling company that owns the resorts.

The New Jersey Casino Control Commission gave unanimous approval today to a group of bondholders led by New York-based Avenue Capital Management to own Trump Entertainment Resorts.

Trump Entertainment plans to emerge soon from its third bankruptcy.

In approving the plan, Casino Control Commission chair Linda Kassekert said: "I am hopeful that the implementation of this reorganization plan will ultimately provide the Trump properties with the means to compete and to thrive."

A U.S. Bankruptcy judge ruled April 12 in favor of a restructuring plan submitted by Trump Entertainment, its bondholders and Donald J. Trump to maintain control of the casino firm over a plan presented by billionaire financier and takeover artist Carl Icahn.

Avenue Capital, which will be the company's largest equity holder at 21.7 percent, said the plan will drastically reduce the company debt from $1.75 billion to $334 million.

Avenue Capital will infuse $225 million into the company; of that, $125 million will go directly for debt payment, the remaining amount for capital expenses, cash and administrative costs.

Donald Trump, who now owns 5 percent of the company, can own no more than 5 percent more.

Trump Entertainment is expected to keep trying to sell the smallest hall, Trump Marina, which it had tried to sell before filing for bankruptcy in February 2009. It also owns the Taj Mahal and Trump Plaza.

CEO Mark Juliano acknowledged before the panel that several parties have shown interest in buying Trump Marina, which sits next to the market-leading Borgata Hotel Casino & Spa.

"We are entertaining a variety of offers now, and will be presenting them to the board shortly," he said.

Gaming analysts say the approval of the restructuring plan will give the Trump casinos a fresh start.

"Significantly reducing the debt burden will allow the new owners to reinvest in the business," said Andrew Zarnett of Deutsche Bank AG.

The outcome of the struggle between the two financial titans - Trump and Icahn - was surprising in that Icahn, known for going after assets in distress and buying at a discount, offered double what the bondholders' and the casino company's plan put forth, and would have left the struggling firm completely debt-free.