Carl Icahn to appeal bankruptcy ruling that gave control of Trump Entertainment Resorts to a group backed by Donald Trump
Carl Icahn plans to appeal a bankruptcy court ruling that gave control of Trump Entertainment Resorts to a group of corporate bondholders backed by Donald Trump.
“We will appeal,” Icahn attorney Edward S. Weisfelner said in an interview with The Press of Atlantic City after a bankruptcy hearing last week. “We think there are fundamental errors in the opinion.”
Lawyers representing Trump Entertainment and the bondholders told The Press they believe the appeal will fail.
“It doesn’t do anything,” attorney Michael F. Walsh said.
U.S. Bankruptcy Court Judge Judith H. Wizmur, in a 120-page opinion, picked the Trump Entertainment bondholders over a competing buyout plan by Icahn for the company’s three Atlantic City casinos.
Attorneys did, however, negotiate an agreement that ensures the $486 million mortgage that Icahn holds on the casinos will remain superior to any other debts. Icahn had proposed converting the mortgage into ownership and wiping out the company’s debt. However, Wizmur ruled in favor of a $225 million bondholder buyout plan that gives Donald Trump up to a 10 percent stake in the company in exchange for the continued use of his name on the casinos.
The name was a key in influencing the judge’s decision. The bondholders had the rights to it, and Icahn did not. Instead, he had talked of possibly rebranding the casinos, which control 20 percent of the multibillion-dollar A.C. market.
Wizmur ruled that the Trump name was worth millions of dollars to the company and that its continued use on the casinos helped to “tilt the balance” in favor of the bondholders over Icahn.
This is the Trump casinos’ third trip through Chapter 11 reorganization.
What's in a name? About $250 million
April 21, 2010