Donald J. Trump and his partners recently won control of bankrupt casino company Trump Entertainment Resorts Inc. after a judge ruled that their bid was better for creditors than a competing offer by investor Carl Icahn.

US Bankruptcy Judge Judith H. Wizmur sided with a group of bondholders who are owed $1.2 billion. Their proposal would reduce Trump Entertainment's debt by $1.4 billion to $334 million and give the celebrity billionaire as much as 10% of the three-casino company he once ran. "This time, we really cut the debt," Trump told the Associated Press. "It was never really cut enough. We've cut the debt down to a low level, and we now have a company in good financial shape."

The ruling ends a 14-month battle for control of Trump Entertainment, which pitted billionaires Icahn and Trump against each other in a Camden, NJ court, and paves the way for Trump Entertainment's three Atlantic City casinos-the Trump Taj Mahal Casino resort, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino-to exit bankruptcy for a third time. In a bid to take over the company, Icahn purchased $480 million in debt from banker Andy Beal in January 2010 before agreeing to pump an additional $125 million worth of financing into the offer. In his plan, that debt would have been converted to equity, wiping out the bondholders-a key fact that led Wizmur to side with the proposal from Trump and the bondholders. The winning plan included a promise by billionaire Marc Lasry of Avenue Capital Group to invest $225 million in Trump Entertainment. Under the bondholder plan, the $480 million in bank debt would be reduced by at least $100 million and the rest would be wrapped up in a new bank loan.

Back in January, many industry insiders were betting on Icahn to emerge victorious. The reason the court sided with Trump is simple, says Edward A. Mermelstein, a

New York City-based real estate attorney and co- founder of Edward A. Mermelstein & Associates: cash is king. "In these types of legal battles, the court typically rules to protect the masses as opposed to the individual," he says. "Trump is also familiar with the properties and he put together a solid marketing proposal" that includes allowing the company to continue using his name, an option that was off the table if Icahn took control.

Trump's lawyers argued in court that the brand was worth millions of dollars to the casino company, and Trump himself, during his testimony, claimed the brand was worth more than $3 billion. "A distinction outside of financing is Trump's well-known marketing prowess and his ability to create excitement, which is a valuable asset to an entertainment company," says his former business partner Elie Hirschfeld, a billionaire real estate tycoon in his own right and president and CEO of Hirschfeld Properties

in New York City. But Mermelstein believes the brand name is a minor issue. "The crux really lies with the fact that cash will always beat out a repositioning from the lenders' side."

In an effort to keep the casino collective close to home, expect to see a lot more of Ivanka Trump in the coming months, as she becomes one of the main public faces of Trump Entertainment. Already known from the Trump Entertainment billboards around Atlantic City dating from the days before she and her father quit its board, the executive vice president of development and acquisitions for the Trump Organization will play

a larger role in marketing Trump Entertainment as well. "If they are looking to bring in a younger crowd and turn this into a hipper destination, Ivanka is definitely a smart choice," says Mermelstein. Joe Weinert, senior vice president of Spectrum Gaming Group, a

New Jersey casino consulting firm that is not involved with Trump Entertainment, believes that the bankruptcy deal will also free up cash the company should use to continue modernizing its properties in the nation's second-largest gambling market.

But despite talk of turning around these assets, there is a larger problem at play here, namely that Atlantic City has suffered huge hits from other states' involvement in the gambling industry. "It's an uphill battle," admits Mermelstein. "There has always been tremendous competition from Las Vegas, but now Connecticut and Pennsylvania are building newer and bigger properties that are, in some cases, closer to the Manhattan Metro area." And while Connecticut and Pennsylvania house slot parlors

that are relatively isolated, Atlantic City has been plagued by blight surrounding its casinos. "Over the past couple of decades, Atlantic City has been going downhill in terms

of improving the areas surrounding these assets," Mermelstein relates. "This limits visitors to each individual property because once you go outside, it can get scary." Hirschfeld agrees Atlantic City is suffering and could use a cleanup, but he notes that it is a weak time for the casino industry in general. "There is no quick fix, but as the economy improves, which is occurring, tourism will return and this will have a positive impact on areas like Atlantic City." New Jersey casino analyst Cory Morowitz adds that the new financing and lower debt give Trump Entertainment "some cushion," but he says rethinking Trump Entertainment's strategy will be key. "Ultimately, its viability will be dependent on its ability to stabilize cash flows in Atlantic City at current levels-and possibly selling Trump Marina. It really needs to reinvent itself to appeal to markets that are currently rejecting it and Atlantic City."

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