Trump plan contribution increased, second-lien noteholders to get cash

By Caroline Salls

Pittsburgh, Oct. 6 - Trump Entertainment Resorts, Inc. filed an amended plan of reorganization and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of New Jersey that changes the amount of the contribution to be made by Donald J. Trump and BNAC, Inc. and provides a recovery to holders of second-lien note claims.

As previously reported, Trump Entertainment Resorts has entered into a purchase agreement with Trump and Beal Bank Nevada affiliate BNAC under which Trump and BNAC will invest $113.9 million in cash in the newly private company and become its owners.

The cash amount was increased from $100 million under the original plan.

Also under the amended plan, the holders of second-lien notes claims will receive $13.9 million in cash for a 1.1% recovery. These creditors were not slated to receive a distribution under the original plan.

In connection with the purchase agreement, Trump Entertainment Resorts and its partnership subsidiary also entered into a commitment letter with Beal Bank and Beal Bank Nevada to restructure $485.06 million in credit agreement debt.

Under the amendment, the maturity of the Beal credit agreement was extended to December 2020 from 2012.

The amendment also allows principal and interest payments on the credit agreement to be deferred.

Interest on the credit facility term loans will be either Base rate plus 475 basis points or Eurodollar plus 575 bps. Interest on the total outstanding deferred balance will be 7.5%.

Ownership breakdown

Under the plan, the Trump partnership will receive partnership interests.

In addition, all of Trump Entertainment Resorts' outstanding capital stock and other equity interests will be canceled and the company's capital stock will be issued to Trump or his designee, making Trump the beneficial owner of all of the company's issued and outstanding capital stock.

Creditor treatment

Creditor treatment will include:

• Administrative expense claims, priority tax claims and other priority claims will be paid in full in cash;

• Holders of other secured claims will either receive the collateral securing their claims or their claims will be reinstated;

• The principal and interest on first-lien lender claims will be paid in accordance with the amended and restated credit facility;

• Holders of second-lien note claims will receive $13.9 million in cash;

• Holders of section 510(b) claims and equity interests will receive no distribution;

• Holders of general unsecured claims that have not been paid as critical vendors will receive no distribution; and

• Intercompany claims will either be reinstated, contributed to capital or discharged.

Trump Entertainment Resorts, an Atlantic City-based owner and operator of three casino resort properties, filed for bankruptcy on Feb. 17, 2009. Its Chapter 11 case number is 09-13654.

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