LOS ANGELES – A federal judge has delayed for a week a decision on proposed bankruptcy financing for Trump Hotels & Casino Resorts Inc. (search) so that shareholders can review the company's finances.
A New Jersey bankruptcy court hearing will now be held Jan. 11 to review the casino operator's $100 million reorganization financing, according to a court filing. The judge earlier this month cleared the financing package, but held off on final approval pending comment from shareholders.
"The plan favors bondholders and Donald Trump (search) at the expense of other shareholders," said Steven Yoder, an attorney for the equity holders. "The gaming industry is pretty profitable .... It isn't even clear that this financing is necessary."
Officials at the New York-based company could not be immediately reached for comment.
A committee of shareholders, formed by the U.S. Trustee last week, argued that it had not been given any financial projections, budgets or cash flow analysis. In addition, shareholders said they need to talk to a witness who will testify in support of the post-bankruptcy financing.
Under the restructuring — negotiated with bondholders before Trump Hotels filed for Chapter 11 bankruptcy protection (search) last month — bondholders will own about two-thirds of the company and Donald Trump's stake would shrink to about 27 percent from 56 percent. The real estate magnate would remain chairman and chief executive.
Trump's three major casinos in Atlantic City have suffered under competition from the Borgata Hotel Casino & Spa (search), a joint venture of Boyd Gaming Corp. and MGM Mirage, which opened last year. The Trump company also owns a riverboat casino in Indiana.
The company's shares, which edged down 4 cents to $1.97 in over-the-counter trading, have nearly quadrupled from 56 cents Nov. 22 after the bankruptcy filing.