Trump seeks OK of $45 million bridge loan; cites liquidity crunch amid confirmation battle

By Caroline Salls

Pittsburgh, March 3 - Trump Entertainment Resorts Inc. requested court approval of a $45 million bridge loan from an informal committee of 8½% senior secured noteholders, according to a Tuesday filing with the U.S. Bankruptcy Court of the District of New Jersey.

The financing would provide liquidity from the date of confirmation of a plan of reorganization submitted by the noteholders until the effective date of that plan, if it is the one ultimately confirmed by the bankruptcy court.

As previously reported, Beal Bank and Icahn Partners have submitted a competing plan, which is also being considered for confirmation.

The company supports the noteholders' plan.

According to the motion, the competing plan process and the company's prolonged stay in bankruptcy, coupled with excessive adequate protection payments to first-lien lenders under Trump's cash collateral use order have placed a strain on its short-term liquidity.

Trump said it has operated so far without debtor-in-possession financing, but now finds itself in a seasonal low exacerbated by record snowstorms.

The company said the loan commitment does not contain any financing or commitment fees, and no principal or interest payments are due until maturity.

Wilmington Trust FSB is the administrative agent for the DIP financing.

Interest will be 10%.

The loan will terminate on the earliest of six months from closing, the effective date of the noteholder plan and the date of confirmation of any other plan.

The DIP facility lenders include note purchasers Avenue Capital Management II, LP; Contrarian Funds, LLC; Continental Casualty Co.; GoldenTree Asset Management, LP; MFC Global Investment Management U.S. LLC; Northeast Investors Trust; Polygon Global Opportunities Master Fund; and Interstate 15 Holdings, Ltd.

Trump said Icahn has offered to provide DIP financing in connection with the Icahn/Beal Bank plan, but the company has not considered that proposal because it strongly opposes confirmation of that plan.

The company said it does not believe that the Icahn financing would be available if the noteholder plan is confirmed, and that the terms of the Icahn DIP financing proposal are inferior because the loan "is tied to a plan that effectively forecloses on the debtors' assets and offers no recovery to creditors."

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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