Nov. 17 (Bloomberg) -- Donald Trump and daughter Ivanka Trump ended their attempt to take control of bankrupt casino company Trump Entertainment Resorts Inc.

Donald Trump will receive common stock and warrants for 10 percent of the Atlantic City, New Jersey-based company if a reorganization plan he agreed to support is approved, according to an e-mailed statement today. The agreement is with 61 percent of holders of the company’s $1.25 billion of 8.5 percent senior notes due in 2015.

The Trumps are dropping all litigation against an ad hoc committee of creditors, plan to release the debtors from claims of more than $100 million and will permit the continued use of Donald Trump’s name on the three Atlantic City casinos, according to the statement. He said his competing reorganization plan was becoming “mired in highly expensive and distracting litigation” in dropping his resistance.

“I have always felt a tremendous responsibility to New Jersey, and especially to Atlantic City,” Donald Trump said in the statement. “Therefore, I am motivated to give the properties the best chance to succeed on a reorganized basis.”

Donald Trump, who once owned 29 percent of the company, and Ivanka Trump resigned from the company’s board before it filed for court protection on Feb. 17. He has abandoned his equity interest in the company, according to court papers. Since the filing, Donald Trump has worked with Trump Entertainment and the company’s lender, Beal Bank, on a reorganization proposal.

‘The Apprentice’

Marc Lasry, chairman and chief executive officer of Avenue Capital Group, the New York-based hedge fund manager and a member of the creditor committee, said in the statement that noteholders were “pleased to have reached an agreement with the Trumps that will avoid continued litigation.”

Donald Trump is a real estate developer and stars in the NBC television show “The Apprentice.” Trump Entertainment was separate from his other investments, according to a past statement. Under the pact, he would be free to use the Trump name for gaming ventures outside of five “neighboring and potentially competitive states.”

Donald Trump and the noteholders group were vying for control of the company should it successfully reorganize and exit bankruptcy. The noteholders have accused Donald Trump and company managers of manipulating the bankruptcy process to give them an advantage over rivals.

Noteholders, who had been collecting evidence to support a court battle with Donald Trump, announced the deal during a telephone conference with the judge overseeing the bankruptcy case, according to court documents.

Choice for Judge

The judge overseeing the bankruptcy was set to choose between the noteholders’ plan, and one proposed by Trump and Beal Bank. The noteholders would suspend the deposition and other requests for evidence through Nov. 25, when another conference call with U.S. Bankruptcy Judge Judith Wizmur in Camden, New Jersey, is scheduled, according to court documents.

Noteholders have offered to cancel as much as $1.25 billion in debt owed to them in exchange for 95 percent of Trump Entertainment. They plan to raise $225 million by selling new stock in the company. One of its three casinos, the Trump Marina Hotel, would be sold for $75 million under the plan.

Under his plan, Donald Trump and Beal Bank would have invested $114 million and Beal would extend the maturity of a $486 million loan it made to Trump Entertainment before the bankruptcy. Beal Bank is owned by Andy Beal, a Dallas businessman and a high-stakes poker player.

Trump personally guaranteed that noteholders would be repaid when the notes were issued in 2005. His attorney, Adam L. Shiff, in an interview in October called the guarantee “a non- issue” in the case. The guarantee cannot be used to force Trump to pay noteholders unless certain events take place, according to court documents.

The case is In re TCI 2 Holdings LLC, 09-13654, U.S. Bankruptcy Court, District of New Jersey (Camden).

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net

Last Updated: November 17, 2009 17:26 EST