NEW YORK, JUNE 5 -- A junk bond holder in two of Donald Trump's Atlantic City casinos filed a lawsuit in federal court in Manhattan today, charging that the high-profile real estate developer shortchanged his older gambling properties to benefit his giant new one, the Taj Mahal.
The class-action lawsuit, filed by a corporation holding mortgage bonds issued by Trump Plaza and Trump Castle, comes as Trump and his principal bank creditors entered their third week of intense talks to try to solve Trump's severe cash crunch.
Representatives of Citicorp, Bankers Trust Corp., Chase Manhattan Corp. and Manufacturers Hanover Corp. today were considering a variety of ways Trump could raise cash to meet interest and other payments of about $25 million due June 15 and still have enough money left over to avert a default later this year on obligations of an estimated $2 billion in bank debt. In addition to the four money-center banks, at least 50 other banks around the country hold Trump debt.
Officials at three of the banks said that while Trump has yet to fall behind in meeting his debt payments, "he's going to have a major cash squeeze coming up," in the words of one banker, unless a solution is found.
Among the options the bankers are considering:
Swapping portions of their debt for an ownership position in profitable Trump properties, such as the Trump Tower on Fifth Avenue.
Forcing Trump to sell some of his properties and businesses to pay down some of his loans.
Trading and selling loans among banks so that lenders holding loans with shaky collateral -- land, for example, that could be sold only at a deep discount -- could better protect themselves by adding loans backed by stronger assets.
The banks already have forced Trump to trim expenses amounting to millions of dollars a year at a number of his operations, which include the casinos, the Trump Shuttle, New York's Plaza Hotel and Trump Tower. Bankers said this week that they found cost controls in the Trump organization to be less than stringent.
Prices of junk bonds used to finance part of Donald Trump's casino and real estate empire fell again today amid speculation that negotiations between the developer and his bankers would further reduce the value of the risky securities. The price of bonds used to build Trump's new Taj Mahal casino in Atlantic City were quoted at $54 to $55 per $100 in face value late today, down from $56 to $58 on Monday.
Junk bonds tied to other Trump holdings fared somewhat better. The Trump Plaza casino's 12 7/8 percent issues were quoted at $81 to $82, down from $82 to $83, and 13 3/4 percent issues backing the Trump Castle casino were little changed at $59 to $60.
The company that filed suit today is Peter Stuyvesant Ltd., a small Pennsylvania-based firm that holds bonds issued by the Plaza and the Castle. The essence of the complaint is that Trump has too many competing casinos and that he has promoted the Taj, which opened this spring, to the detriment of the other two.
The class-action lawsuit contends Trump gave the Taj a confidential list of ''high level gamblers and affluent clientele'' of the Trump Plaza and Trump Castle without compensating the hotels for the information, in violation of bond agreements. And it charges that Trump violated federal securities laws by not disclosing the transaction.
The corporation that filed the suit seeks unspecified damages for the sharp decline in value of the bonds in recent weeks.
A spokesman for Trump did not return phone calls requesting comment on the lawsuit.
Trump's silence did nothing to silence New York's tabloid newspapers, which today displayed their usual bottomless appetite for news about Trump, as they feasted on his woes by splashing them across the front page. The New York Post's front-page headline was, "Uh-Owe!" and an inside feature on the Taj Mahal was titled, "The Taj: Eighth Blunder of the World?"
Daily News columnist Gail Collins said the city was "about to have one of those magic New York moments when people of all creeds, races and economic backgrounds join together in a single thought: Hehehehehehe."