The poster boy of American capitalism -- at least as far as the tube-watching classes are concerned -- finalized an important deal today. Of course, Trump's latest deal is a Pyrrhic victory, an event born of his utter failure to discharge his duties as the head of a public company -- even though he was operating in a field that is overripe with profitability. Just check out results from the likes of Boyd Gaming (NYSE:BYD), Harrah's Entertainment (NYSE:HET), Mandalay Resort Group (NYSE:MBG), and Caesars Entertainment (NYSE:CZR).
Today Trump Hotels and Casino Resorts (OTCBB: DJTC) finally announced a long-awaited bankruptcy deal that will spare the Donald's hide by keeping him in charge of the show. The "recapitalization," as he prefers to call it, reduces the debt load by $400-odd million and secures $100 million from Beal Bank to keep the repo men from carting away the furniture.
It also takes away about half of Trump's interest in the firm. Bondholders will get two-thirds of the new firm while Trump will walk away with 27%. This way, at least the future shareholders may have some hope of ousting Trump from the pilot's seat should he begin heading toward the rocks yet again.
Stockholders, of course, end up with the short end of the stick, meaning a tiny portion of the new company's equity. Such an outcome is exactly why Tim Beyers -- who enjoys gawking at the Donald on GE's (NYSE:GE) NBC prime time -- warned investors away from the stock at Halloween.
I'll go ahead and warn investors away from any new stock, too. A quick peek at Trump's complex web of personal and business fronts ought to convince anyone that the Donald is in business for the Donald alone. As a shareholder, you're just be another easy mark, providing limos, hair gel, and silk ties to this two-time loser. You'll have better odds in one of his casinos.
For related Foolishness:
- Ponder Donald and denim.
- See why Trump's company is unfit for public consumption.
- Yeah, Trump is still a chump.
Seth Jayson would rather have his eyes poked out by a stray hair from Donald's combover than watch The Apprentice. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profilehere. Fool rules arehere.
