Trump Hotels & Casino Resorts filed its long-awaited Chapter 11 bankruptcy plan in New Jersey on Sunday as part of a negotiated deal with creditors that will reduce Trump's ownership stake and control of the company.
The company's financial problems have tarnished Trump's reputation as a successful dealmaker and businessman as he rides the popularity of the reality television show "The Apprentice," in which he plays a starring role. Trump has pointed out that his hotel and casino operations are only a small part of his total business holdings. He will remain as chairman of the hotel and casino company with an annual base salary of $2 million.
"The process has been a very constructive one and should reap great benefits for everyone in the years to come," Trump said in a statement. "This is a company with one of the best brands in the world and with great potential."
The company's major holdings are in Atlantic City, where its Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino have faced increasing competition. The company also operates a riverboat casino in Gary, Ind., and manages Trump 29 Casino, a Native American-owned facility near Palms Springs.
Under an agreement worked out in advance with creditors, Trump Hotels & Casino Resorts filed a reorganization plan that dramatically reduces the company's debt and interest payments. In return, Trump will pump about $71 million into the reorganized company and reduce his ownership stake to 27% from 47%.
Existing common stockholders other than Trump will receive the right to purchase new common shares in Trump Hotel & Casinos after it emerges from Bankruptcy Court protection.
The plan must still be approved by a Bankruptcy Court judge.
This is the second time Trump's hotel and casino operations have landed in Bankruptcy Court. Trump Taj Mahal, Trump Castle and Trump Plaza filed for Chapter 11 protection in the early 1990s.
Times wire services contributed to this report.