On or shortly after June 17, Donald Trump’s lawyers file paperwork to declare bankruptcy for the Trump Taj Mahal and take last year’s prepackaged plan to a federal judge.
Last November, Trump missed a $47.3 million interest payment and defaulted on his $675 million Taj Mahal debt. Carl Icahn (one of the Taj Mahal bondholders) and Wilbur Ross, representing a majority of the casino’s bondholders, worked out a prepackaged bankruptcy with Trump to keep the business running.
New Jersey’s Casino Control Commission approved of the plan in recent days. With that approval, Trump takes the next step and files for bankruptcy. If the courts approve of the package, Trump will lose up to half of his stake in the Taj Mahal to the bondholders.
The package is approved on October 4.
A “prepackaged” bankruptcy petition, in which the majority of creditors and the debtor had already agreed on a plan that needed the court’s approval, was approved in Federal bankruptcy court yesterday. As part of the petition, Mr. Trump must insure that the casino meets projections for earnings and performance in order to keep control of the company’s board.The New York Times – Oct. 5, 1991
Note 1: Some reports say Trump loses half of his stake in the company. Other reports say 20 percent.
Note 2: The Trump’s Castle Hotel and Casino is also filing for bankruptcy around this time, but I think it’s separate from the Taj Mahal package.