A bankruptcy court judge has said the words Donald Trump has longed to hear ever since he lost control of the casino empire that bears his name: "You're hired."
U.S. Bankruptcy Court Judge Judith Wizmur chose a group consisting of corporate bondholders and the real estate mogul and star of the reality TV series "The Celebrity Apprentice" to buy the three casinos of Trump Entertainment Resorts out of bankruptcy.
Under the deal, bondholders led by New York-based Avenue Capital Group will own most of the company. Mainly in return for the continued use of his famous name on the buildings, Trump will get a 10 percent stake.
"This is a great victory for us and a great victory for Atlantic City," Trump said after the ruling. "We look forward to making this company great again.
"Since I opened Trump Plaza over 25 years ago, I have always thought that through smart investments we could create a truly special and vibrant resort on the Atlantic Ocean," he said. "We have a company with a solid balance sheet, enthusiastic ownership and dedicated management, and I am enthusiastic about the future."
The group offered $225 million for the company, topping a bid by billionaire investor Carl Icahn and Texas-based Beal Bank.
Icahn had bought the $486 million mortgage on Trump Entertainment Resorts and proposed converting the debt into ownership of the company.
Wizmur wrote that the Icahn-Beal plan was more feasible in that it would eliminate the company's debt. But the Trump-bondholder plan provides a partial recovery for investors, who would have been wiped out under the Icahn plan.
The company "would continue to benefit from the use of the Trump brand, and the future support of Donald and Ivanka Trump, free from potential litigation, rebranding costs and disruptions, and the associated business risks with losing the brand," Wizmur wrote.
During the trial, Icahn's team considered stripping the Trump name from the casinos. Icahn, through an attorney, declined comment on the judge's decision.
The judge also wrote that New Jersey casino regulators would more quickly approve the bondholders and Trump.
Had Icahn won, he would have owned four of Atlantic City's 11 casinos. He bought the Tropicana Casino and Resort at a last month for $200 million out of bankruptcy court.
Getting Trump Entertainment's casinos would have placed him on equal footing with Harrah's Entertainment Inc., which also owns four casinos here. It would have concentrated most of the nation's second-largest gambling market in the hands of just two owners.
The decision capped a 14-month battle over the future of the flagship Trump Taj Mahal Casino Resort, the Trump Plaza Hotel and Casino and the Trump Marina Hotel Casino.
Trump Entertainment filed for Chapter 11 bankruptcy court protection in February 2009 shortly after Donald Trump resigned as chairman of its board and vowed he would regain control from the outside. Trump had lost control of the company in a previous bankruptcy proceeding in 2005. He resigned as chairman of the board and his daughter Ivanka also stepped down from the board four days before the company filed for bankruptcy most recently, in February 2009.
Mark Juliano, CEO of Trump Entertainment Resorts, said Judge Wizmur approved the bid from Trump and the bondholders because it injects new capital into the business and allows the company to shed $1.4 billion in debt. It will emerge from bankruptcy with $334 million in debt.
"It would have been a disaster had it gone the other way," Juliano said of the judge's decision.
The outlook for Trump Entertainment remains challenging. Atlantic City is in the fourth year of a revenue decline caused by new slots parlors opening in nearby Pennsylvania, New York and Delaware, and exacerbated by the recession.
But Marc Lasry, the chairman and CEO of Avenue Capital Group, said the bondholders still believe in Atlantic City.
"We are making this investment into this company because we firmly believe in the future of the gaming business in Atlantic City and the strength of the Trump brand," he said. "Despite the tough effects of the economic downturn, the fact remains that the attributes that make Atlantic City special have not changed."
Smaller casinos like Trump Marina, one of the worst-performing of Atlantic City's 11 gambling halls, are particularly vulnerable.
Before the bankruptcy filing, Trump Entertainment tried to sell Trump Marina to New York developer Richard Fields, but the deal fell apart. Donald Trump and Juliano said it is too soon to determine what will become of that casino.
Donald Trump was already looking at cross-marketing possibilities Monday evening.
"The TV show (The Celebrity Apprentice) is doing fantastic, and now we can put the casinos in the show," he said.
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