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Trump Financial Package Revealed in Accountant’s Report

August 16, 1990 GMT

ATLANTIC CITY, N.J. (AP) _ Donald Trump owes $3.2 billion to banks, $69.5 milion to subcontractors who helped build the Taj Mahal casino and is involved in 111 court cases, according to documents released Wednesday.

The documents also reveal that several of Trump’s marquee properties, including the Taj Mahal and the Plaza Hotel in Manhattan, may be worth hundreds of millions of dollars less than he claims.

The asset analysis by the firm Kenneth Leventhal & Co. was among documents released by the state Casino Control Commission in advance of hearings Thursday and Friday over a $65 million rescue plan Trump reached with creditors in June.

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The papers - which Trump unsuccessfully fought to keep private - give some of the most detailed information yet about the troubled developer’s holdings and the rescue plan.

They also cover such matters as lawsuits and other court action by aggrieved parties ranging from his estranged wife Ivana to the New Jersey State Funeral Directors.

Under the rescue plan, Trump gave up substantial control of his real estate and hotel empire in exchange for a debt restructuring that kept his holdings out of bankruptcy.

Leventhal’s report, based on figures as of April 30, said Trump controlled $4.6 billion in assets with a market value of $3.7 billion to $3.9 billion and a short-term liquidation value of $2.9 billion to $3.5 billion.

The severity of Trump’s financial problems began surfacing in June, after he missed a $43 million payment on bonds used to finance Trump Castle Casino Resort By the Bay and payments on a $30 million bank loan.

The documents state that Trump has outstanding debts of $3.2 billion to lending institutions, including $933 million to Citibank.

Trump already has pledged his three Atlantic City casinos - Trump Castle, the Taj Mahal Casino Resort and Trump Plaza Hotel and Casino - as collateral for new loans granted under the rescue plan.

Trump put up his equity in the Taj Mahal as a guarantee of an existing $75 million loan by First Fidelity Bancorp.; his equity in Trump Castle to secure an existing $13 million loan by Midlantic Bank; and his equity in Trump Plaza to secure a $19.6 million letter of credit from National Westminster Bancorp.

The restructuring also defers payments on some of the outstanding bonds for the three casinos and his Manhattan properties for three and five years.

Trump spokesman Norma Foerderer said Trump would have no comment on the documents.

A cover letter on the on the report prepared for Trump’s lenders by Leventhal asked the commission to keep details of the restructuring plan confidential.

″This report contains highly confidential and sensitive information which is vital to Donald J. Trump,″ the letter said. ″Dissemination or disclosure of any or all the contents of this report could adversely affect those interests.″

The rescue plan also requires Trump to sell some assets to raise cash, although there has been speculation that such transactions could amount to a ″fire sale″ because some values were depressed.

The major assets listed by Trump, with the value he assigns to them, the going market rate estimated by Leventhal and the short-term liquidation value estimated by Leventhal were:

- Taj Mahal and adjacent land: $1.06 billion, $767.5 million, and $740.7 million.

- Trump Plaza, the land under it and the adjacent land: $647.8 million, $555.2 million to $655.2 million, and between $412.4 million and $642.4 million.

- Trump Castle: $571.5 million, $400 million to $460 million, and $300 million to $350 million.

- The Plaza Hotel in Manhattan: $830 million, $450 million to $550 million, and $413.2 million to $500 million.

- The Grand Hyatt Hotel in Manhattan: $150 million, $90 million to $110 million, and $80 million to $100 million.

- The Trump Shuttle airline: $340 million, $340 million, and $150 million to $300 million.

Also included was a 29-page list of 111 legal matters involving Trump. They included lawsuits filed by Ivana Trump and by former securities analyst Marvin Roffman, who claimed he was fired due to complaints by Trump. Another complaint was filed by the New Jersey State Funeral Directors charging an alleged breach of a booking agreement at a Trump casino.

Trump also owes $69.5 million to 253 subcontractors who worked on the Taj Mahal on projects from installing minarets and chandeliers to bathroom fixtures. The subcontractors who have not sued Trump for payment are negotiating with him for payment.

Trump’s attorneys lost an appeal Wednesday to keep the documents sealed. State Supreme Court Justice Alan Handler upheld a two-judge appellate panel’s decision, rejecting Trump’s argument that release of the documents would cause him undue harm.