Trump Entertainment Resorts files plan based on $100 million Trump, Beal Bank affiliate investment

By Caroline Salls

Pittsburgh, Aug. 4 - Trump Entertainment Resorts, Inc. has entered into a purchase agreement with Donald J. Trump and Beal Bank Nevada affiliate BNAC, Inc. under which Trump and BNAC will invest $100 million cash in the newly private company and become its owners, according to a company news release.

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 roughly $486 million in credit agreement debt.

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

According to an 8-K filed with the Securities and Exchange Commission, 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%.

The purchase agreement and amended credit agreement form the basis of a plan of reorganization and related disclosure statement filed with the U.S. Bankruptcy Court for the District of New Jersey.

Trump Entertainment said the plan is backed by its management and received the approval of its board of directors.

"The plan of reorganization that we filed today is a significant event for our company because it includes an adjustment to our debt and the commitment of Mr. Trump and BNAC to invest new capital," Trump Entertainment chief executive Mark Juliano said in the release.

"As a private enterprise under the ownership of the Trump family and BNAC, the company will be well capitalized and positioned for success, and we are hopeful for the court's expeditious approval so that the new capital can start being invested."

Donald J. Trump said in the release, "My previous investment in the company was destroyed by excessive and restrictive debt. This reorganization changes all that.

"My daughter Ivanka and I will work tirelessly to make this company great again."

Ownership breakdown

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

In addition, all of Trump Entertainment's outstanding capital stock and other equity interests will be cancelled 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 claim 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, 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.

The disclosure statement approval hearing is scheduled for Sept. 16.

Trump Entertainment Resorts, an Atlantic City-based owner and operator of three casino resort properties, filed for bankruptcy on Feb. 17 in the U.S. Bankruptcy Court for the District of New Jersey. Its Chapter 11 case number is 09-13654.

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