And on Tuesday, Bally's board of directors approved a so-called poison-pill defense that would discourage potential takeovers. The defense, a shareholder- rights plan, would be triggered by a number of events, including the announcement by any investor or group that it had acquired 20 percent or more of Bally Manufacturing's common stock.
A Trump organization spokesman would not comment yesterday about the suit or about Trump's intentions with Bally.
But Donald Trump will be expected to explain himself later this month, when he will be called before New Jersey's Casino Control Commission as part of hearings on whether Bally's gambling license will be renewed, according to Thomas Flynn, commission spokesman.
Bally owns three casinos, one in Atlantic City and two in Nevada. It manufactures gambling machines and runs state lotteries, including one in California.
Trump owns the Trump Plaza Hotel & Casino and Trump's Castle Hotel & Casino. Together, according to the Bally suit, the two casinos have 19.3 percent of the Atlantic City market and Bally's Park Place has 9.9 percent.
"They consider him a hostile investor," said Marvin Roffman, a gaming- industry analyst for Philadelphia's Janney Montgomery Scott Inc., an investment firm. "They don't want him to buy their company."
"Trump has stated publicly that he considers Bally a good investment," said Al Glasgow, editor of Atlantic City Action, a gaming industry newsletter, and, occasionally, a Trump consultant. "And Trump's made a lot of good
investments. It's an investment to him. I think Bally is paranoid."
The suit contends that although Trump said his stock purchases were intended for investment purposes, his true intent was to control the company.
"Trump intends to continue warehousing additional large blocks of Bally shares," the suit said, adding, "Trump hopes to wrest control of Bally from its public shareholders without paying them the control premium they otherwise could command had they been adequately informed of Trump's intentions."
If Trump gains control of Bally's Park Place, it will hamper free competition and violate antitrust laws, the suit said.
According to the suit, Trump purchased 764,000 shares of Bally common stock for $14.9 million, just under the $15 million amount that would trigger a 30- day waiting period under a federal antitrust act - the Hart-Scott Rodino Antitrust Improvements Act of 1976.
He also spent more than $45 million to acquire 2,195,300 shares through an option to buy stock from his investment banker, giving Trump control of nearly $60 million worth of stock, the suit said.
The suit calls Trump's actions "illegal" and asks U.S. District Judge John F. Gerry to grant an injunction requiring Trump to state his intentions, preventing him from acquiring more stock and forcing him to give back the stock he has.
It is the second time in a month that news of Trump's purchase of casino stock was followed by defensive action from the casino's owners.
By early November, Trump had purchased 4.9 percent of the stock of Holiday Corp., the company that owns Harrah's Marina Hotel Casino on Atlantic City's bayfront.
On Nov. 12, Holiday Corp. announced a $2.8 billion recapitalization plan that would give stockholders additional dividends. Although such a plan would make the corporation a less attractive takeover target, company spokesmen denied that the recapitalization was a response to Trump or any threatened takeover.
According to the suit filed by Bally yesterday, Trump made a $35 million profit when he sold his 4.9 percent stock share in Holiday. Stock values had increased as word of his stock purchases became known in the investment community.
"Trump's laughing all the way to the bank," Glasgow said.
On March 11, Trump spent $73 million to buy out Holiday Corp.'s interest in the Trump Plaza Hotel & Casino, located on the Boardwalk. Trump and Holiday Corp., through its subsidiary, Harrah's Hotels and Casinos, had been involved in a bitter partnership battle that included dueling lawsuits.