BANKRUPTCY: In Deep Water But Afloat

The self-proclaimed King of the Deal managed to stave off disaster again -- but for how long? Last week Donald Trump missed a $47 million semiannual interest payment on $675 million worth of junk bonds used to finance his Taj Mahal casino in Atlantic City. Taj bondholders had the right to foreclose completely on the casino, but the developer persuaded them to go into business with him instead.

The agreement, subject to the approval of the bondholders and the New Jersey Casino Control Commission, will forgive at least $13 million of annual interest and allows Trump and his investors to split ownership of the casino fifty-fifty. Provided he can meet certain performance goals, Trump will retain control of the company as chairman.

By agreeing to come to terms before they appear in court, Trump and his bondholders hope to limit to a few weeks the time the Taj spends in Chapter 11. But while Trump seems to have put out one fire, he will soon be busy with others. Over the next several weeks, he must make two more multimillion-dollar interest payments -- for Atlantic City's Trump Castle and Manhattan's Plaza Hotel.