Trump Marina Hotel Casino, in Atlantic City, NJ Photo by: Vernon Ogrodnek

By DONALD WITTKOWSKI Press of A.C.Staff Writer | Wednesday, February 24, 2010

Trump Entertainment Resorts Inc. will resurrect negotiations to sell Trump Marina Hotel Casino to the businessman who wanted to buy it last year, but the new price is only a fraction of the original.

Mark Juliano, chief executive officer of Trump Entertainment, said the company has received an offer of $75 million from Richard T. Fields, chairman of the New York gaming group Coastal Marina LLC.

“That’s the offer we have on the table. Will we go back to him and ask for more? That’s possible,” Juliano said in an interview Wednesday at U.S. Bankruptcy Court.

Trump Entertainment and Fields originally reached a tentative $316 million deal for the Marina in 2008. In hope of salvaging the sale, the price was lowered to $270 million last year before negotiations collapsed.

The new $75 million price tag reflects plunging real estate values in the Atlantic City gaming market, now mired in a three-year slump because of the sluggish economy and casino competition from surrounding states.

Trump Marina’s sale is part of the company’s plan to have corporate bondholders backed by Donald Trump take over the Trump casinos and pull them out of Chapter 11 bankruptcy.

Billionaire investor Carl Icahn, who has teamed up with Texas banker Andy Beal, has submitted a competing plan to buy the Trump casinos.

Icahn, in a videotaped deposition played Tuesday in bankruptcy court, said he would consider selling both Trump Marina and Trump Plaza Hotel and Casino if he gains control of the Trump gaming empire.

Icahn added that he has not made a final decision, although he believes “it might make some sense” to sell the Marina and Plaza and keep only the flagship Trump Taj Mahal Casino Resort.

A hearing on the competing buyout plans continues this week in bankruptcy court, with Donald Trump scheduled to testify today. Bankruptcy Judge Judith H. Wizmur will choose the winner, but her ruling is not expected for at least a few weeks.

In testimony Wednesday, Trump Entertainment’s financial adviser said Trump Marina’s sale would help stabilize the company amid declining revenue and lower earnings projections. He predicted a deal with Fields would be completed by the end of 2011, if not sooner.

“It is our strong belief that the Marina will be sold,” said Andrew Yearley, managing director at Lazard Freres & Co. “They will find a way to sell that asset. There is a legitimate buyer out there.”

Trump Entertainment still holds the $17 million down payment that Fields put toward the purchase last year. The down payment would be included in the proposed $75 million transaction, Juliano said.

Fields announced last year that he would transform Trump Marina into a Margaritaville-themed casino in partnership with singer-songwriter Jimmy Buffett.

Yearley testified that Trump Marina’s sale also would result in the settlement of a 2004 lawsuit pitting Donald Trump against Fields. Trump alleges that Fields cheated him out of a development deal for the Hard Rock casinos in Florida owned by the Seminole tribe.

Under questioning by Icahn’s lawyer, Yearley disclosed that the bondholder-backed restructuring plan also could involve some type of “strategic transaction” for Trump Plaza, possibly a sale or bringing in a new joint venture partner.

“The Plaza is an underperforming property,” he said. “Something has to be done with the Plaza over time.”

Bondholders, who own $1.25 billion in Trump Entertainment notes, have offered to buy the casinos for $225 million. They propose giving Donald Trump as much as a 10 percent share in the company in exchange for the continued use of his famous name on the casinos.

However, Icahn’s attorneys question whether Trump Entertainment, on behalf of the bondholders, could assume the rights to the Trump name in a bankruptcy restructuring. Trump is expected to discuss his trademark licensing agreement with the company when he testifies.

Icahn also would like to keep the Trump casino name. He has bought a majority of Trump Entertainment’s $486 million loan held by Beal Bank and proposes to convert the debt into ownership of the company.