US hotel mogul seeks protection from creditors
The hotels and casinos business of flamboyant US businessman Donald Trump has announced is to seek protection from its creditors under US bankruptcy law as part of a financial restructuring.
Trump Hotels & Casino Resorts, which includes the 904-bedroom and suite Trump Plaza in Atlantic City, will go into Chapter 11 protection as part of a complex restructuring agreement with investment bank Credit Suisse First Boston (CSFB).
Chapter 11 allows companies a breathing space in which they can rearrange their finances and carry on trading.
In a statement, the business said it planned to "effect the transactions in a Chapter 11 proceeding pursuant to a pre-negotiated plan of reorganisation in order to implement the recapitalisation plan in an efficient and timely manner."
It will enter Chapter 11 by the end of September, with the deal set to have been completed during the first three months of next year.
The agreement means $1.8b (£985m) of debt will be restructured and CSFB and Trump will together invest $400m (£219m) in the business.
But it also means Trump's holding in the company will be much reduced, meaning he relinquishes overall control of the business, although he will remain as chairman.
by Nic Paton
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