Trump inks deal with Beal Bank and Icahn to resolve plan disputes

By Caroline Salls

Pittsburgh, Sept. 24 - Trump Entertainment Resorts, Inc. has reached a global settlement with first-lien credit facility agent Beal Bank, SSB and Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II LP to resolve all disputes and lawsuits related to Trump's confirmed plan of reorganization, according to an 8-K filed Friday with the Securities and Exchange Commission.

As previously reported, Trump's plan took effect on July 16.

Under the settlement, which is subject to approval by the U.S. Bankruptcy Court for the District of New Jersey, all pending proceedings related to the plan will be dismissed or withdrawn.

These proceedings include Beal Bank and Icahn's appeal of the plan confirmation order and is currently pending before the U.S. District Court for the District of New Jersey. In the appeal, the first-lien lenders raised issues involving feasibility of the plan, cramdown, market rate of interest and the reasonableness of a settlement agreement with Donald J. Trump.

Other proceedings that will be dismissed or withdrawn include a first-lien lender cash payment recharacterization motion; a lawsuit claiming that some of the company's proposed transactions with the New Jersey Casino Redevelopment Authority violated the first-lien credit agreement; fee objections; a motion to disallow a $125 million prepayment; administrative expense claims; and an intercreditor breach lawsuit filed against members of an informal committee of 8½% noteholders.

Credit agreement changes

Also under the settlement, Trump's amended and restated credit agreement with Beal Bank and Icahn will be amended and new promissory notes will be issued under the amended credit agreement to replace promissory notes issued on the plan effective date.

Specifically under the amendment, the initial principal amount of the interest-bearing portion of the term loans will be increased to $346.5 million from $334 million, and the $22.4 million non-interest portion of the principal amount will be eliminated.

The principal amount of the interest-bearing portion of the term loans will continue to bear interest at the fixed annual rate of 12%.

The first-lien lenders have also agreed not to seek any prepayment premiums, penalties or fees arising from the plan of reorganization transactions, and they have agreed to consent to the redevelopment authority transaction.

In addition, the reorganized company will make a $15 million payment to Icahn, which will satisfy all of Trump's credit agreement obligations to reimburse, advance or indemnify costs, fees, and expenses incurred by the first-lien lenders.

New interim CFO

According to the 8-K, Trump's board of directors has appointed Daniel M. McFadden as interim chief financial officer, effective immediately. McFadden replaced John F. Burke.

A hearing on approval of the settlement is scheduled for Oct. 5.

Trump Entertainment Resorts is an Atlantic City-based owner and operator of casino resort properties.

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