Newspaper article THE JOURNAL RECORD

Business World Begins to Resemble Wild Game of Craps

Newspaper article THE JOURNAL RECORD

Business World Begins to Resemble Wild Game of Craps

Article excerpt

The business world is getting to look more and more like a wild game of craps in which not even the house is guaranteed to be a winner.

For example, there's entertainer Merv Griffin, the erstwhile high roller who got himself into a financial mess by acquiring Resorts International Inc. in a takeover battle with real estate developer Donald J. Trump.

Resorts International, the hotel-casino company Griffin bought for $365 million last November, said Monday it was going to halt interest payments on $925 million of secured and unsecured notes.

Resorts said its cash flow isn't adequate to meet the interest on thcourt.

So far, there's no indication Griffin's close friend, Eva Gabor, has been asked to hock her jewels to help bail out her pal.

But the holders of the Resorts secured notes were angered to learn they are being treated the same as the holders of the unsecured notes. Not surprisingly, the secured notes were sold by Drexel Burnham Lambert Inc., the firm that dominates the junk bond market.

Speaking of junk bonds, there is poetic justice in the news that Kohlberg Kravis Roberts & Co., the leveraged buyout firm that was involved in the savaging of RJR Nabisco Inc., may itself be put into play, after a fashion.

One of the firm's founders, Jerome Kohlberg Jr., has sued his fellow partners, charging they shorted him on his stake in four companies Kohlberg Kravis bought between 1979 and 1985. Maybe a little internecine warfare will cool off Kohlberg Kravis' takeover appetite.

Ironically, it appears the aforementioned Mr. Trump might get further involved in the airline industry's crap shoot, which has heated up with the speculation that even AMR Inc. …

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