Patrons of Donald J. Trump's gambling halls probably won't notice, but his casino empire has entered bankruptcy proceedings after months of negotiations with bondholders over a crushing $1.8-billion debt.
Trump Hotels & Casino Resorts Inc. -- mainly consisting of three Atlantic City, N.J., properties and a riverboat casino in Indiana -- and related operations sought a Chapter 11 restructuring Sunday after reaching agreement with most of its creditors on a new financial structure.
Trump's stake would be slashed to 27% from 47%, even after he plowed $72 million into the new operation. Other common shareholders would be mostly wiped out, and bondholders would control about two-thirds of the equity in the reorganized company under the proposed restructuring plan, which is subject to U.S. Bankruptcy Court approval.
The bonds-for-equity swap would reduce annual interest costs by about $100 million a year. And Trump said the restructured company would have the financial flexibility to add a new hotel tower to the Taj Mahal, his largest Atlantic City casino, and renovate the others.
Trump, whom Forbes magazine in September ranked as the 74th-richest American, with a net worth estimated at $2.6 billion, would stay on as chairman and chief executive of the casino company. But the bondholders, led by several New York investment banks, would be able to appoint five board members, while Trump could name three. They would choose a ninth member together.