Trump Shuffle Jeopardized by Feuding Banks

Donald Trump’s tentative debt restructuring arrangement, which is needed to bolster his troubled real estate and casino empire, is being jeopardized by ongoing disputes among small and large creditor banks, a report published today said.

Negotiations fell apart Saturday, the New York Times said, when the big lenders argued over the proposed terms of the loan package reached earlier this month. At the center of the dispute is how much each bank should contribute and the collateral to be used, the newspaper said, quoting unidentified sources.

Trump’s financial problems grew more precarious Friday after he missed the payment on an estimated $31 million in interest and principal on bonds used to finance his Trump’s Castle hotel-casino in Atlantic City.

Trump was given a 10-day grace period Friday. If he doesn’t come up with the money before the grace period expires, he could be in default, and that might place Trump in jeopardy of losing his New Jersey casino licenses.

Banking sources familiar with the talks said last week that Trump’s four major bank lenders--Citibank, Bank Trust New York Corp., Chase Manhattan and Manufacturers Hanover--agreed to provide an additional $60 million in loans and to temporarily suspend interest payments.

The sources had said Citicorp and Bankers Trust would provide about two-thirds of the new loan.

The big banks have been trying to persuade some of the smaller creditors, including some Japanese banks, to go along with the proposed restructuring, but some of those institutions have been opposed to the plan. First Fidelity Bancorp of Newark, N.J., and MidLantic Banks Inc. of Edison, N.J., reportedly were the main holdouts.

The ongoing negotiations have also raised speculation that bankers want more authority over operation of Trump’s properties.