Four months after Trump's company filed for Chapter 11 (search), U.S. Bankruptcy Judge Judith Wizmur signed off on the company's reorganization, a bonds-for-equity swap under which the star of TV's "The Apprentice (search)" will surrender majority control but retain the titles of chairman and chief executive officer in the new company. It will be called Trump Entertainment Resorts.
The company is to emerge from bankruptcy in about 30 days.
The approval came easily, thanks in part to a March 28 agreement in which Trump bought off dissident shareholders who were expected to turn the court confirmation process into a bitter, drawn-out affair.
Under the deal, Trump Hotels has agreed to pay $17.5 million to the 20,000 stockholders, and also have them share in proceeds from a land sale. Altogether, holders of common stock are to get between $2 and $3 for each share they held, a big boost from the approximately half-cent per share contemplated under the original reorganization plan.
Trump Hotels, which operates three casinos in Atlantic City (search) and a riverboat casino in Gary, Ind., has struggled to compete under the weight of $1.8 billion in high-interest, junk bond debt.
Under the reorganizations, the company will borrow $500 million to refurbish its tired Atlantic City casinos and perhaps make a play in Pennsylvania, which approved slot machines last year.
The company is expected to save an estimated $98 million annually in interest payments as a result of the restructuring.