Trump Bond Prices Decline Again as Holders File Suit

Prices of junk bonds used to finance part of Donald J. Trump’s empire fell again Tuesday amid speculation that negotiations between the developer and his bankers would further reduce the value of the securities.

Bondholders, meanwhile, filed a class-action lawsuit seeking to block Trump and his associates from promoting his new Taj Mahal casino at the expense of the Trump Plaza and Trump Castle holdings in Atlantic City, N.J.

The price of 14% bonds used to back the Taj Mahal was quoted at $54 to $55 per $100 in face value late Tuesday, down from $56-$58 on Monday.

Prices for the issues fell sharply Monday, with the Taj bonds skidding as much as $10, when Trump confirmed a report in the Wall Street Journal that he has been meeting with major lenders who have grown increasingly uneasy about his ability to handle his reported $2-billion bank debt.

The U.S. District Court lawsuit claimed that Trump gave the Taj a confidential list of “high-level gamblers and affluent clientele” of the Trump Plaza and Trump Castle without compensating the hotels for the information, in violation of bond agreements.

The lawsuit claims that Trump violated federal securities laws by not disclosing the transaction and seeks an order barring him from using any of the hotels’ information or assets to benefit the Taj.