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Trump Entertainment Casinos Get a Standing Eight-Count
ATLANTIC CITY, NEW JERSEY --
Today is the end of the grace period given Trump Entertainment toward the $53 million payment it missed on December 1st, and after spending the morning with officials discussing "prepackaged bankruptcy", the company managed to negotiate a three-week extension to restructure its debt. While earlier in the day it seemed likely that Trump Entertainment would beat Station Casinos to be the first big casino operator to bankrupt, a late deal to give the company until January 21st was hammered out in the afternoon.
However, according to regulatory filings, if as much as twenty-five percent of bond holders reject the deal, the debtors could demand payment in full on notes. Still, it seems likely the new deadline will be granted, as pushing bankruptcy would not be in the interest of those holding notes. Seventy percent have already agreed.
Trump Entertainment has lost over ninety-six percent of its value since the start of 2008, closing today at seventeen cents per share, three cents off yesterday's close.
Also causing problems was the ongoing sale of the Trump Marina Casino. The resort was scheduled to be sold to Richard Fields and developed as a Margaritaville casino, using the popular and ubiquitous brand created by singer Jimmy Buffett. But the buyers' consortium was unable to get financing the amount negotiated, so the sale is going forward at a price in the $750 illion range, down several hundred million, costing Trump Entertainment much-needed liquidity.
At least one prominent investment analyst, Barbara Cappaert of KDP Investment Advisors, thinks the bondholders, posessing almost $2 billion in Trump debt, should demand equity as well as Donald Trump's ouster as controlling partner in any debt renegotiation.
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