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Donald Trump might be weighing a prepackaged bankruptcy for his Atlantic City-based gaming company as a way to get bondholders to discount their holdings in a $1.8 billion debt restructuring plan, sources told High-Yield Report, a sister publication of IDD.
Speculation about a possible bankruptcy comes just one week after Trump Hotels & Casino Resorts Inc. missed a $73.1 million interest payment on its $1.3 billion of outstanding debt. The company has a 30-day grace period in which to make the payment, but bondholders fear it could signal a move to strong-arm them into accepting less money as Trump attempts to financially revive the publicly traded company.
"We've heard talk about a prepackaged bankruptcy," said one bondholder. "Right now it is just talk, but you can't rule it out. It wouldn't leave [bondholders] with much wiggle room."
Trump has made no secret of the fact he wants bondholders to take a discount on their investments as he attempts to restructure the company's debt. He is already working with...