DEAL SPOTLIGHT
Icahn, Beal Propose
Reorganization for TER
As part of a move to pull Trump Entertainment out of bankruptcy, billionaire investor Carl
Icahn has acquired a majority of the casino company’s senior debt owed to Beal Bank.
Through Icahn Partners LP and certain
affiliates, billionaire investor Carl Icahn
has acquired 51% of the first-lien debt
owed by Trump
Entertainment
Resorts to Beal
Bank for $229 million in cash. Icahn
also has the option to purchase the rest
for around $220 million, according to
papers filed on Dec. 11, 2009 with the
US Bankruptcy Court for the District
of New Jersey in Camden.
The deal, which was negotiated with
BY ALYSON GRALA
This sets the stage for a battle with
real estate tycoon Donald Trump, who
is backing a rival plan for the casinos’
bondholders.
“I fully recognize the need to move
forward promptly and to avoid or
minimize uncertainty to give each plan
a full and fair consideration,” US Judge
Judith Wizmur said in court docu-
ments. “The way to do that is to move
forward as competing plans.”
Creditors would be able to vote on
each of the plans and a confirmation
the reorganized debtors as a backstop
fee in consideration for their agreement
to provide such backstop.
“Unless Donald Trump comes in with some hard
cash, I just don’t see how he’s going to have a
continued presence at these casino assets.”
—Edward A. Mermelstein
Edward A. Mermelstein & Associates
Beal Bank and Beal Bank Nevada, is
part of a bankruptcy reorganization
plan Icahn devised to help the troubled
casino company emerge from Chapter 11. It’s the third such filing for the
company—which owns Trump Taj Mahal Casino Resort, Trump Plaza Hotel
and Casino and Trump Marina Hotel
Casino—or its corporate predecessors.
hearing is scheduled for later this year.
One key component of Ichan’s pro-
posal is a capital contribution of $225
million in new equity—in exchange for
70% of the new equity in the reorga-
nized debtors—in the form of a rights
offering to holders of the debtors’ 8.5%
senior secured notes. Those holders
will receive 20% of the new equity in
of the new equity in the reorganized
debtors to holders of second-lien notes
and general unsecured claims.
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