Trump Bailout Plan Approved By New Jersey Casino Commission
ATLANTIC CITY, N.J. (AP) _ The state casino board today approved a financial bailout plan for developer Donald Trump, staving off what his lawyers said last week could have been the collapse of his empire.
In a uninimous vote, the Casino Control Commission granted Trump permission to use his three Atlantic City gaming halls as collateral for a $65 million bank loan that is the center of the bailout.
Trump attended the half-hour meeting, staring straight ahead, unsmiling and with his lips pursed, even as the plan was approved.
″This is a big hurdle and I’m happy,″ Trump told a throng of reporters and camera crews. ″Maybe you can focus on someone else now.″
During hearings last week, Trump’s attorneys told the commission that rejection of the plan, or even a delay of more than a week or so, could topple the first domino in the celebrity developer’s casino, airline and real estate empire.
Although the vote to approve was 5-0, commissioner W. David Waters said he was concerned because the commission had not looked into greater detail at Trump’s casino debt.
Acting Commission Chairwoman Valerie Armstrong said Trump would have to return sometime in October for a hearing on the overall financial stability of his casinos and other holdings.
″I do not view this restructuring as the total solution to the problem,″ Armstrong said. ″We must hold a full financial stability hearing as soon as possible.″
The loan allowed Trump to make an overdue $43 million bond payment in June on the Trump Castle casino.
Earlier, the state Division of Gaming Enforcement had reluctantly endorsed the plan but criticized the debt-heavy state of Trump’s casinos. The division added provisos to the plan requiring that Trump return three weeks from now with details of how he plans to make a $47 million bond payment due Nov. 15 on his new Taj Mahal Casino Resort.
Trump is expected to return with a proposal to swap some of his $3.2 billion in debt for equity, sell assets - perhaps the poorly performing Trump Shuttle airline - or negotiate reduced or deferred interest rates.
Ed Tracy, president of Trump’s three casinos and one non-casino hotel here, said the commission’s decision to postpone ruling on the matter until today did not cause problems with the banks.
Claridge Casino Hotel president Roger Wagner said Monday that Trump’s stated desire to keep all three casinos would prove difficult.
″I think he would like to do that,″ Wagner said. ″But maybe that is a positioning he has to do to keep the value up.″
Wagner, who stayed at the Claridge after an April offer to become president at Trump Castle, said there might not be much of a market for the casinos because of a stagnant gaming market overall.
He said the April 2 opening of the Trump Taj Mahal Casino Resort hamstrung Trump by further taxing his already strained resources.