Donald Trump's Trump Hotels & Casino Resorts Inc. filed for bankruptcy protection with a plan to cut debt by $400 million and renovate its properties.
The Atlantic City, New Jersey-based company, which owns four casinos and has $1.8 billion in debt, yesterday sought Chapter 11 reorganization in U.S. Bankruptcy Court in Camden, New Jersey. The filing is the second casino bankruptcy for Chairman and Chief Executive Officer Donald Trump, the real-estate billionaire who headlines NBC's reality-television show ``The Apprentice.''
Bondholders of Trump Hotels, which has lost money since its 1995 initial public offering, agreed to swap debt for equity, cash and new bonds to cut the company's annual interest expenses by $100 million. Trump Hotels plans to build a hotel tower at the Taj Mahal casino and will enter new markets to increase cash flow.
Trump Hotels is ``currently overleveraged and losing market share and revenue to other competitors,'' Chief Financial Officer Francis X. McCarthy said in court papers. Bankruptcy can help it ``deleverage and obtain needed financing to implement overdue capital expenditures and be able to successfully compete.''
Trump, 58, whose Taj Mahal filed for protection in 1990, will retain his positions at the company while cutting his equity stake to 27 percent from 56 percent. Scott Butera, a former investment banker who helped negotiate the agreement with bondholders, in October was named Trump Hotels president and chief operating officer.
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