ATLANTIC CITY, N.J. -- Entertainer Merv Griffin took control of Resorts International Inc. Tuesday, ending eight months of battles and negotiations with real estate developer Donald Trump that left the casino company witha massive $339.8 million third-quarter loss.
Thomas Gallagher, an attorney for the former talk show host and game show syndicator, said The Griffin Co. purchased Trump's Class B stock in Resorts for approximately $96.2 million. Griffin also acquired the Class A stock and the remaining Class B stock of the public stockholders of Resorts for $36 a share.
The day-long transaction was the first step in consummating the complex Griffin-Trump deal, Gallagher said.
When the second phase of the deal closes Wednesday, Trump Taj Mahal Associates Limited Partnership will acquire the Taj Mahal Casino Hotel from Resorts for about $273 million. A Trump affiliate will receive about $63 million for terminating its management agreement with Resorts.
'I am thrilled that we have finally completed this enormously complex deal,' Griffin said in a prepared statement Tuesday. 'We can now get to work revitalizing Resort's hotels and casinos in Atlantic City and Paradise Island (in the Bahamas).'
Gallagher said Griffin had signed many of the transaction papers in advance of Tuesday's meeting and was not present for the final consummation. Trump stopped briefly at Gallagher's New York offices 'to see if things were in order,' the lawyer said.
Gallagher and Resorts officials said they were not surprised by third-quarter results, which showed Resorts suffered a net loss of $339.8 million, up from a net loss of $6.96 million for the same period in 1987.
All but about $4 million of that is related to the sale, according to the company's figures. The company recorded a $335 million charge reflecting its losses on the Taj Mahal project and the payment to cancel Trump's management contract.
Third-quarter revenues climbed to to $123.88 million from $118.06 million. 'Once this deal is completed with Donald, a lot of the capitalized interest will change, (and) the Taj Mahal will no longer be on our books,' said H. Steven Norton, executive vice president of Resorts.
Griffin, who was granted an interim state casino license last month by the Casino Control Commission, has said he planned to spend 'a good part of my life' at the casino hotel.
Griffin said that 'after several years of turmoil, Resorts now has the long-term, fully committed ownership and management to succeed.'
Officials at Resorts said they are throwing a 'Welcome Merv' party at the casino Wednesday afternoon.
For the first nine months, Resorts had a net loss of $357.4 million in contrast to a profit of $5.93 million, or 92 cents a share, in the corresponding 1987 span. Nine-months revenue rose to $353.55 million from $348.04 million.