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Trump to Trump: 'You're fired!'
Donald steps down as CEO but remains chairman of casino company, says bankruptcy won't affect him.
August 10, 2004: 4:26 PM EDT

As part of a bankruptcy plan for Trump Hotel & Casino Resorts, Donald Trump will lose CEO title but remain chairman.  
As part of a bankruptcy plan for Trump Hotel & Casino Resorts, Donald Trump will lose CEO title but remain chairman.

NEW YORK (CNN/Money) - Trump Hotels & Casino Resorts Inc., Donald Trump's troubled casino business, said it has fired the real estate tycoon as CEO but will keep him as the company's chairman.

The casino holding, which will continue to operate under Trump's name, said Tuesday its key bond holders have agreed to take the company into voluntary bankruptcy and restructure its $1.8 billion in debt to get a $400 million capital infusion.

Known to fans of NBC's reality show "The Apprentice" for his trademark line "You're fired!," Trump has agreed to cut his controlling stake in the company to 25 percent.

CSFB's DLJ Merchant Banking Partners III will co-invest $400 million with Trump and take a majority stake.

In an exclusive interview, Trump told CNNfn's Gerri Willis on "Open House" that he won't be personally affected by the reorganization. "This is a very small portion of my net worth. It's less than 2 percent," said Trump.

When asked if he thinks the bankruptcy announcement would tarnish his image as an entrepreneur, Trump said the casino business is just one of the many companies he owns.

Trump will remain chairman of the company, which owns four casinos, including the Taj Mahal in Atlantic City, and has been seeking for months to restructure its debt.

It has come close to defaulting on interest payments in the process, although that did not threaten the developer's non-casino real estate projects, which are held separately.

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Donald Trump talks with CNNfn's Gerri Willis about Trump Hotels and Casino Resorts Inc.'s bankruptcy filing and the reality show 'The Apprentice.'

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The New York Stock Exchange said Tuesday that Trump Hotels & Casino stock should be suspended immediately in light of the company's recapitalization plan.

"In light of all the circumstances involving the company... the NYSE has determined that the company's current common stock no longer satisfies the requirements for continued listing on the NYSE," said the statement, according to Reuters.

But Trump Hotels has a right to a review of the NYSE's determination by a committee of the board of the exchange.

Restructuring plan

A significant amount of casino bond holders have agreed to swap $1.8 billion in debt for $1.25 billion in new 10-year publicly traded debt and a mix of cash and stock in the new company.

The annual interest rate will fall to 7.875 percent from an average of approximately 12 percent, and the company said it would be able to secure up to $500 million in new financing.

Stockholders will have the right to buy new shares in a rights offering, which will leave shareholders other than Donald Trump with between 0.1 and 4 percent of the new company.

Trump Hotels & Casino Resorts Incorporated
Company Debt
Restructuring and Recapitalizations

"The Company intends to effect the transactions in a Chapter 11 (bankruptcy) proceeding pursuant to a pre-negotiated plan of reorganization in order to implement the Recapitalization Plan in an efficient and timely manner," the company said.

It aims to begin the filing by the end of September and end in the first quarter of 2005.

Trump himself will invest $55 million in the new company with CSFB and $15.9 million in notes. He would also receive land in Atlantic City, and his real estate firm would get the right of first offer to serve as contractor for new development.

The restructuring will cut the company's annual cash interest expense by about $110.2 million.  Top of page

-- Reuters contributed to the story

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