Trump to pay equity committee $17.5 million in settlement; bondholders consent to revised plan

By Ellen Chang

Houston, March 28 - Trump Hotels & Casino Resorts, Inc. said it reached an agreement with its official committee of equity security holders under which it will make a cash payment to stockholders and other changes to the plan of reorganization in return for the withdrawal of their opposition to the reorganization.

The informal committees of holders of the company's Trump Atlantic City Associates' first mortgage notes and Trump Casino Holdings' first and second priority mortgage notes have consented to the plan, the company said.

Under the deal, Trump Hotels will make a $17.5 million cash payment to the company's unaffiliated common stockholders as part of its plan of reorganization.

In addition, Donald J. Trump will exchange his right to receive the former World's Fair Site in Atlantic City, New Jersey for additional equity in the recapitalized company, bringing Trump's stake to 30% of the company's fully diluted common stock.

The World's Fair Site would be sold at auction and the net proceeds distributed to the company's unaffiliated common stockholders. The property will be subject to a perpetual negative covenant preventing future owners or any transferee, assignee, occupant or lessee from developing any gaming activities on the property.

"We are pleased to have reached an agreement with the equity committee which provides additional value to our shareholders and facilitates the execution of the company's recapitalization plan," said Scott C. Butera, the president and chief operating officer, in a written statement. "The company's plan now has overwhelming support from its major equity and fixed income stakeholders."

The class A warrants to purchase up to an aggregate of approximately 8.29% of the recapitalized company's new common stock will be reallocated, with the unaffiliated common stockholders receiving class A warrants to purchase up to approximately 5.34% of the recapitalized company's new common stock and Mr. Trump receiving the remaining warrants to purchase approximately 2.95% of the new common stock.

Mr. Trump will be the largest individual holder of the company's common stock.

The company said it believes that the equity committee's support of the plan will expedite the reorganization process and help it meet its initial timeline to emerge from the court process by the beginning of May.

A hearing to confirm the plan is scheduled for April 5.

Trump Hotels & Casino Resorts filed for bankruptcy on Nov. 21 in the U.S. Bankruptcy Court for the District of New Jersey. Its Chapter 11 case number is 04-46898.

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