On Thursday Trump hotels filed for chapter 11 bankruptcy protection, after reaching an agreement with bondholder to recapitalize debt. The plan will ease Trump's 1.8 billion dollar bond debt. the bankruptcy plan calls for 400 million dollars in debt reduction with an 8.5 % reduced interest rate. These measures should save the casino giant 98 million dollars a year in interest payments. Mr. Trump remains as chairman of the board and chief executive of THCR (Trump Hotel and Casino Resorts) Trump is expected to renovate and expand many of its existing properties, such as Trump Taj Mahal, Trump Plaza, and Trump Marina.
The debt restructure is in exchange for 74 million dollars in cash, 395 million dollars in common stock, and 1.25 billion dollars in new debt at the reduced interest rate of 8.5 percent. This restructuring seems like a fairly unfavorable use of chapter 11 bankruptcy. The reduction is debt is only 550 million dollars, with a fairly large increase in outstanding shares of common stock.
This report is after Donald Trump nearly was fired by his shareholders for consistent losses for all investing shareholders. The trouble that Trump is having also points to a lack of ability for Atlantic City casinos to be able to compete with the more family oriented Vegas gambling houses. Vegas' competitive advantage starts with more activities for all ages, including amusement parks, arcades, shopping and entertainment for families. Vegas' departure from adult only activities led Las Vegas into its largest economic boom in history.
Article found at: http://msnbc.msn.com/id/6305752/