Trump Makes Deal to Hold Part of Casino : Taj Mahal: Pact will give bondholders a 50% stake and will also permit developer to remain as chairman.

Donald Trump reached a deal today with investors in his Taj Mahal casino that will briefly put it under bankruptcy-court protection and give them a 50% stake but will also permit the developer to remain as chairman.

The arrangement was reached more than 12 hours after Trump missed a $47.3-million interest payment on $675 million worth of high-yield junk bonds used to finance the gambling parlor, the biggest and ritziest in Atlantic City.

The bondholders had threatened to push Trump into bankruptcy proceedings and seize control of the Taj Mahal in what could have been a long and nasty legal brawl.

Under a compromise arrangement, both sides agreed to restructure the debt in what is known as a “prepackaged” bankruptcy filing that will enable the casino to emerge from court protection within weeks, negotiators said.

“The result is turning out to be a very positive one,” Trump said at a joint news conference with his aides and representatives of the bondholders group.

Still, the flamboyant developer who once prided himself as a masterful businessman with enormous wealth looked grim during the news conference, held at another one of his swank properties, the Plaza Hotel in Manhattan. He didn’t shake hands with any creditor representatives, and his lip was curled.

Under the agreement, the interest rate on the bonds will be reduced to 12% from the current 14% and bondholders will initially receive 50% of the stock in the casino.

The terms are substantially better than the 9% interest rate and 20% stake originally proposed by Trump.

In addition, Wilbur Ross, the chief representative of the bondholders group, said Trump will be required to meet certain performance standards or control of the casino will be passed to bondholders.

Ross said he believes that investors holding 90% of the bonds have agreed to the restructuring, including Carl Icahn.