A bankruptcy court in New Jersey approved Trump Entertainment's reorganization plan, which both The Donald and his daughter, Ivanka Trump, supported. The two will take as much as a 10% stake in the casino company.
Under the new plan, the company will receive $225 million in new equity from an offering of common stock, and Trump Entertainment will also keep the Trump brand for its Atlantic City casinos, which include Trump Taj Mahal, Trump Marina and Trump Plaza.
The bondholder group, which is led by the New York private-equity firm Avenue Capital, is owed $1.2 billion. Under the plan, Avenue Capital becomes the largest shareholder in Trump Entertainment.
Icahn submitted an opposing plan, which was denied, and will have 10 days to appeal the judge's decision.
Icahn holds $480 million of Trump Entertainment's bank debt. He currently owns the Tropicana on the Atlantic City Boardwalk.
Trump Entertainment is expected to emerge from bankruptcy later this year.
The three Trump casinos comprise 20% of the Atlantic City gaming market, which has been beaten down amid the recession. In March, gaming revenues in the New Jersey gambling hub tumbled 5.6% to $300.8 million.
Atlantic City's weak results have prompted several casino operators and investors to pull out of the market. Most notably,
recently decided to divest its 50% stake in the Borgata, which it co-owns with
MGM decided to sell off its stake as New Jersey regulators say its business partner in Macau, Pansy Ho, is unsuitable, due to her family's alleged ties to Chinese organized crime. Instead of undergoing a lengthy investigation process, MGM opted instead to pursue growth opportunities in Macau, like its pending initial public offering, uninterrupted.
also announced earlier in the month that it is
Morgan Stanley has already invested $1.2 billion on the project, which was slated to cost $2.6 billion. The opening of Revel had been postponed last year until 2011 after financing ran out.
-- Reported by Jeanine Poggi in New York.
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