onald Trump will receive common stock and warrants for 10 % of the Atlantic City, New Jersey-based company if a reorganization plan he agreed to support is approved, according to an e-mailed statement today. The agreement is with 61 % of holders of the company’s us$ 1.25 billion of 8.5 % senior notes due in 2015.
Under the deal, the Trumps will drop a us$ 116 million bid for the casinos they had been making with Beal Bank, the company's largest secured lender. The noteholders' reorganization plan will still need to be approved by the bankruptcy court.
The Trumps are dropping all litigation against an ad hoc committee of creditors, plan to release the debtors from claims of more than $100 million and will permit the continued use of Donald Trump’s name on the three Atlantic City casinos, according to the statement. He said his competing reorganization plan was becoming “mired in highly expensive and distracting litigation” in dropping his resistance.
“I have always felt a tremendous responsibility to New Jersey, and especially to Atlantic City,” Donald Trump said in the statement. “Therefore, I am motivated to give the properties the best chance to succeed on a reorganized basis.”
Donald Trump, who once owned 29 % of the company, and Ivanka Trump resigned from the company’s board before it filed for court protection on February 17. He has abandoned his equity interest in the company, according to court papers. Since the filing, Donald Trump has worked with Trump Entertainment and the company’s lender, Beal Bank, on a reorganization proposal.