Celebrity real estate developer Donald Trump, optimistic about a casino comeback, took the stand in U.S. bankruptcy court on Thursday to fight for control of the three Atlantic City hotel-casinos bearing his name.
In just over an hour of testimony at a New Jersey courthouse, Trump said he believed the Trump Entertainment Resorts
I want to see this company succeed, Trump told the court. I think it has a great chance of succeeding, and that is very important to me because it has my name on it.
Trump, appearing calm and relaxed in a black suit and bright blue tie, made jabs at rival bidder Carl Icahn, portraying his opponent as a vulture who would not invest the necessary dollars in the future of the casinos and has a mixed track record of guiding companies through bankruptcy.
Trump said his plan for the casinos would rehabilitate them and allow them to grow, but also said two of the casinos could eventually be sold if it does not work out.
Shares of the company rose 41 percent in the over-the-counter market after his testimony.
Trump and his daughter Ivanka were both in court on Thursday, having teamed with the company's bondholders to push a plan to invest $225 million in a reorganized Trump Entertainment by selling stock and paying down some of the company's $485 million secured debt.
That debt is held by Texas banker and high-stakes poker player Andy Beal and billionaire Icahn, who have proposed their own competing reorganization plan for the casinos.
For Trump, the deal would give the him up to 10 percent of the company and a way back to the business he walked away from a year ago, days before Trump Entertainment Resorts, in February of last year, made its third filing for bankruptcy.
Ivanka Trump would also play a larger role in the future of the casinos, having negotiated much of the current deal with the bondholders herself. Ivanka sat a few rows back in the courtroom on Thursday, nodding or shaking her head as her father testified about the deal.
In his testimony, Trump described his long history with Atlantic City, how he gave up his spot on the company's board last year, and an earlier unfinished deal he had made with Beal before they were adversaries.
In the earlier deal, Beal and Trump had planned to each invest $50 million in the company and put a new $500 million mortgage on the properties, in a plan that would have left bondholders with little recovery.
I would have been running it and it would have been a little bit like the old days when I was running it like a private company, Trump testified, saying he was ready to spend more time in Atlantic City and that he would have even tried to move his reality show The Apprentice to Atlantic City.
But late last year that deal fell apart as Trump switched sides and began working with bondholders, led by distressed investment fund Avenue Capital.
Trump said he expects the bondholders and Avenue Capital to pump money into the properties to make them first-class casinos, and allow them to grow. While the Taj Mahal has recently been rehabilitated, Trump said he expects a determination would be made about whether it was worth spending money on the Plaza and Marina or if they should be sold.
I believe the investors are coming in with a very large pot of money... and they're going to spend it, Trump said.
Carl spends nothing -- if Carl spent three dollars I'd be shocked, Trump said in a dig at his rival.
Icahn is a latecomer to the case. He purchased a majority of the bank debt for 92.5 percent of face value from Beal Bank late last year, disrupting negotiations for a consensual plan.
I didn't understand why Andy did that, Trump said about Beal's sale of the debt to Icahn at a discount. Trump also said there was a personal matter that led to the collapse of his deal with Beal.
Beal and Icahn have said the bondholder plan risks starving the company of cash if the battered Atlantic City gaming market does not recover.
Trump, however, poses a potential branding problem for Icahn. According to Trump, the current licensing agreement to use his brand on the casinos has terminated and Beal and Icahn do not have a right to use his name without his consent. He said on Thursday that his brand, which is also used on neckties and housing complexes, has recently been valued at $3 billion.
Icahn and Beal have argued in court papers that they can keep the brand.
The case is In re: TCI 2 Holdings, LLC, U.S. Bankruptcy Court, District of New Jersey, No. 09-13654
(Reporting by Emily Chasan; Editing by Tim Dobbyn and Matthew Lewis)