Trump's exclusivity terminated at request of 8½% noteholders group

By Caroline Salls

Pittsburgh, Aug. 31 - Trump Entertainment Resorts Inc.'s exclusive right to file a plan of reorganization and solicit votes on the plan has been terminated by the U.S. Bankruptcy Court for the District of New Jersey.

According to the order filed Monday, the company's exclusivity was terminated at the request of an informal committee of holders of the 8½% senior secured notes due 2015 issued by Trump Entertainment Resorts Holdings, LP and Trump Entertainment Resorts Funding, Inc.

As previously reported, the noteholder group objected to the company's proposed plan, arguing that it unfairly favors Beal Bank and Donald Trump.

The noteholder group said the plan treats Beal Bank as marginally undersecured, but reinstates the pre-bankruptcy balance of its debt at a higher coupon rate and proposes to pay it more than 100% on account of the secured portion of its claim.

In addition, the committee said the proposed plan not only offers preferential treatment to Beal Bank's claims, "it offers a sweetheart deal to Donald Trump" who will acquire new stock on account of his junior claims or equity interests and "will obtain lucrative personal benefits under various agreements, without regard to the absolute priority rule."

According to the objection, the company has rejected an "economically superior" noteholder plan in favor of the "insider-driven" plan.

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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.