Trump Casinos to File for Bankruptcy
August 10After failing to share in his highly
publicized successes in other areas in the
recent years, Donald Trump's casino businesses
are being restructures under bankruptcy
protection that will take away the major stake
Trump has in the companies.
With the plan that was announced late Monday,
Trump Hotels and Casino Resorts will enter
Chapter 11 next month, and emerge within a years
time.
Trump and DLJ Merchant Banking Partners,
which is part of Credit Suisse First Boston,
will put up $400 million to help the beleaguered
company reduce its $1.8 billion debt to cut
interest rates in half.
Trump, who is
the chairman, chief executive and largest
shareholder, would see his stake in the company
shrink from 56 percent to 25 percent, with
Credit Suisse owning more than two-thirds of the
company.
It is said that Trump will put up just under
$71 million, $55 million of the $70 million will
be in the form of a co-investment with Credit
Suisse and about $ 15.9 million will come from
his Trump Casino holdings. It is also noted that
Trump will also give up the trademark rights to
his name and likeness for use with casino
operations.
In a statement Trump stated that he is
looking forward to the recapitalized company
becoming a major player in the development of
the gaming industry.
This will make the second time Trump casinos
have gone through bankruptcy restructuring. The
first time was back in 1992, he then owned three
casinos. That bankruptcy was said to be touched
off by the recession of 1990-91. Trump regained
control of those casinos later on. Trump is well
known for his ability to succeed through tough
times.
