Famous dealmaker Donald Trump, the American dream icon and one of the world's richest men, is broke again. Having struck a bankruptcy deal with Credit Suisse First Boston bank, the billionaire disclosed last week a plan to build the tallest building is Las Vegas – a 64-story hotel.
Donald Trump, the bankrupt genius, to build tallest building in Las Vegas
Famous dealmaker Donald Trump, the American dream icon and one of the world's richest men, is broke again. His debt-burdened company Trump Hotels and Casino Resorts will be restructured under a bankruptcy protection plan announced last week.
Under the restructuring deal Trump and investment banker Credit Suisse First Boston (CSFB) will invest $400 million to help the struggling company. The money will help pay down its $1.8 billion in debt and cut interest payments in half. The move will also strip Trump of his majority stake and trademark rights related to his likeness and name for any marketing associated with the casinos, according to wistv.com.
Trump's stake in the company will dwindle from 56 percent to 25 percent, telegraph.co.uk reported. The plan will also wipe out all the other shareholders and investors who bought into the company when it went public in 1995, as the shares have fallen 90 percent since joining the stock market.
Trump waved away suggestions that shareholders might be unhappy. "Ask me that question in a year from now," he said.
Donald Trump seems quite happy with the deal. In true Trump style, he will still be paid $2 million a year to promote the business, an arrangement that is unusual even for Wall Street.
"I have had a wonderful long-standing working relationship with CSFB, and I am proud to be able to partner with them. I look forward to our recapitalized company being a major player in the evolving gaming industry," he said in a statement, quoted by hotelinteractive.com.
"The timing of our recapitalization plan is ideal, given the many changes taking place in the gaming industry and the many opportunities that we believe will become available," said Scott C. Butera, Executive Vice President of Corporate & Strategic Development, with Trump Hotels & Casino Resorts.
He was written off in 1990 after being forced into bankruptcy, with $900 million in personal debt and nearly $3.5 billion in business debt, but Wall Street baled him out, once again proving the adage that if you owe the bank a million dollars you are in trouble, but if you owe a billion dollars – the bank is in trouble.
Despite the troubles Trump has found time to plan new developments – last week the bankrupt billionaire announced he is planning to build the tallest building is Las Vegas, a 64-story hotel-condominium tower.
The deal with CSFB is just one in a series of brilliant achievements that marked Trump's life this year. He became star and executive producer of the of the NBC reality show, The Apprentice, in which a group of competitors battle for a high-level management job in one of Trump's commercial enterprises. In April he proposed to his girlfriend, model Melania Knauss, and in August his new Trump board game hit the stores.
The New York Times estimates his fortune at $1.7billion, while Forbes magazine guesses $2.5billion.
Trump would not take these figures seriously, saying $2.5 billion is still not so bad. He put his wealth at between $4billion and $6billion.
"They have no idea what I own. I'm private. The casinos are substantially less than 2 percent of my assets," he said.
