Real estate mogul Donald Trump and a group of bondholders won control of the three Atlantic City casinos of Trump Entertainment Resorts Inc, a bankruptcy court judge ruled on Monday.
Judge Judith Wizmur selected the Trump-backed plan over a competing plan from Carl Icahn, who now owns the Tropicana hotel-casino on the Atlantic City boardwalk.
Under the new plan, the company will receive $225 million in new equity from an offering of common stock and will retain the Trump brand for its Atlantic City operations.
There is significant value to the debtors and to the AHC (ad hoc committee) proponents of the plan in the certainty of the retention of the Trump brand for the benefit of the reorganized debtors, Judge Wizmur said in her ruling.
The Trump brand is worth millions of dollars to the debtors, she added.
Under Icahn's plan, it was uncertain whether the three casinos could continue to operate under the Trump brand name.
Trump Entertainment filed for bankruptcy protection in February 2009 after struggling with a heavy debt load and a slide in gaming revenue. Later that year, Trump emerged as a bidder for the company, but months later aligned himself with bondholders owed $1.25 billion.
Both the Trump and Icahn plans have been revamped several times in the last three months, according to the ruling. This is the sixth version of the Trump plan and Wizmur wrote the plan's confirmation was subject to certain modifications.
In a statement, Trump said it expects to emerge from bankruptcy later this year. Representatives for Icahn and Beal Bank, Icahn's would-be partner, could not be reached late Monday night.
Avenue Capital, the lead bondholder in the reorganization process, will become the company's largest shareholder with 21 percent of the reorganized company.
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, said Marc Lasry, Avenue Capital Group's chief executive.
The three Trump casinos comprise about one-fifth of the gaming positions, hotel rooms and gaming revenue in the Atlantic City market.