Trump Entertainment Resorts backed a plan Thursday to let bondholders buy the company's three Atlantic City casinos out of bankruptcy and give Donald Trump a minority share.
But after weeks of talks, the bondholders and Trump still could not reach an agreement with Beal Bank. The bank, which is based in Dallas, will file a competing plan Friday for obtaining the company by converting its $486 million loan to the casinos into equity in the company.
Judge Judith Wizmur encouraged both sides to keep working toward a deal that would eliminate the need for her to choose between the competing plans.
"We have some brilliant minds at work, some creative minds who understand what's at stake," she said.
Trump Entertainment CEO Mark Juliano said both sides will resume negotiating next week, and said he is optimistic a deal can be reached outside of court.
The company's board met Thursday morning and decided to throw its support behind a bid by the bondholders and Donald Trump _ two former opponents who became unlikely allies last month when Trump switched sides and joined forces with the bondholders.
Their joint offer would pay $225 million for the Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino. Donald Trump would get a 10 percent stake in the reorganized company.
Juliano said that plan would leave the company in better shape than the one proposed by Beal Bank.
"Both plans are feasible, but this is a better platform for growth," he said. "It brings the debt down to a reasonable level."
The plan being pushed by Beal Bank, headed by Trump friend Andy Beal, would eliminate all the company's debt in return for ownership of the company. Beal attorney Thomas Lauria said both sides are at an impasse over one issues, but he, Juliano and bondholder attorney Kris Hansen all declined to say what it is.
Trump Entertainment filed to Chapter 11 protection in February, the third such filing for the company or its corporate predecessors.
Donald and Ivanka Trump, who resigned from the board of the company two days before it filed for bankruptcy, tried to buy the company themselves and take it private. They were offering $114 million with Beal Bank, and were locked in a battle with bondholders for control of the company.
But Trump switched sides last month, saying the company's reorganization plan was mired in expensive litigation that made a successful outcome unlikely.
The company had been struggling with crushing debt that became even more painful when the economy soured and competition from slots parlors in Pennsylvania and New York increased, siphoning away some of Atlantic City's best customers by offering them places to gamble closer to home.