The New Jersey Casino Control Commission gave preliminary approval Wednesday to a group led by New York-based Avenue Capital Management to own Trump Entertainment Resorts.
It also approved the company's bankruptcy court reorganization, paving the way for Trump Entertainment to emerge from its third bankruptcy by Monday.
Avenue Capital, which specializes in buying the debt of distressed companies and trying to turn them around, will own the largest single stake in the company - 21.7 percent.
Marc Lasry, Avenue Capital's CEO, said it plans to operate the casinos for at least the next five years.
"We believe that five years from now, that equity (will be) worth a huge amount of money," he said. "That's the bet we're making. The biggest issue Trump had was it was just massively over-leveraged."
"I'm nervous about it," he admitted. "I'm also excited. It's a phenomenal opportunity. But at the same time, there's a lot of challenges. I hope we will be able to do a good job."
A bankruptcy court judge chose the bond holders' bid for the company over one pressed by billionaire investor Carl Icahn, who has appealed that decision.
Commission Chairwoman Linda Kassekert welcomed Lasry to the city, which is in the fourth year of a revenue plunge that began when slots parlors opened in neighboring Pennsylvania. Now, table games are offered there, too.
"At a time when others believe Atlantic City's best days are behind her, Avenue Capital sees opportunity. It sees potential," she said. "We share the vision of a healthy future for the casino industry here."
Donald Trump will own 10 percent of the company. Lasry said he hopes Trump will take an active hand in operating the company.
"We'd love to have him as involved as he wants to be," Lasry said. "I'd love to have him do every episode of `The Apprentice' at the Taj Mahal."
Trump told The Associated Press he plans to be as involved as his schedule will allow, but could not estimate what portion of his time the casinos might occupy. An agreement with Trump and his daughter Ivanka allows the casinos to use their names and likenesses for promotional purposes.
"This was a great victory for us, the bond holders and I," Trump said. "We are going to make this very successful. We're really positioned to do something special. We got rid of so much debt, and we have the best brand in town, by far."
The company is expected to proceed with efforts to sell its smallest gambling hall, Trump Marina. Lasry said the company is fielding expressions of interest from several potential buyers.
Whether it is sold or Trump Entertainment keeps and renovates it depends on how much the buyers bid, he added.
"You need to spend quite a lot of money fixing it up," he said. "We may come to a conclusion that the value of the Marina is greater than what someone is willing to give us."
If sale talks fail, closing Trump Marina is not an option, Lasry said. Neither is seeking a quick buyer for the entire company.
"We try to invest in companies when things are at the worst part of the cycle," he said. "Going forward, there's going to be a huge opportunity here. People will look back on it and say, `Wow, that was a great time to invest."' Trump Entertainment also owns the Trump Taj Mahal Casino Resort and Trump Plaza Hotel Casino.
Trump Plaza has room for expansion, but a decision on whether to do that is not imminent, CEO Mark Juliano said.
Lasry said Avenue Capital does not plan to take cash out of Trump Entertainment over the next five years and is open to making additional capital investments in the company if necessary.
Due to the bankruptcy proceeding, the company's debt will be cut to $334 million, from nearly $1.8 billion.
"Eighty percent of that debt is going away," Lasry said.
"Eighty percent of the customers have not gone away. We think there's a huge upside."