Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Creditors Angered By Trump Entertainment's Bankruptcy Plan
Author: Joel R. Glucksman
Date: November 20, 2014
Key Contacts
Back
The unsecured creditors of Trump Entertainment Resorts Inc. are expressing frustration with the company’s plan to restructure itself in bankruptcy.
Many creditors have called the restructuring plan a “charade” that will simply allow billionaire investor Carl Icahn to save hundreds of millions of dollars in tax credits, according to The Wall Street Journal. This is because, instead of securing votes from many of its creditors – as is typical after filing for protection under Chapter 11 of the bankruptcy law – the company has said that only Icahn’s vote will be considered in its decision. A Nov. 5 hearing will determine whether the court approves this voting scheme.
The “debt-for-equity” deal allows Icahn and his companies to swap some of their debt for a controlling interest in the reorganized Trump Entertainment, the Journal reported. Additionally, Icahn will invest $100 million in the struggling company. Meanwhile, unsecured creditors are expected to recoup none of their $13.5 million in debt.
According to Law360, Atlantic City is also displeased with Trump Entertainment’s Chapter 11 disclosure statement. The city argues that the restructuring plan does not address the $22 million that the company owes in unpaid city taxes.
Icahn has said that the company’s casino Trump Taj Mahal can only stay open if it receives a major aid package from the New Jersey government, but this appears to be unlikely at this stage.
The unsecured creditors’ complaints call the plan “patently unconfirmable,” the Journal reported. This is because it proposes to allow the company to exit bankruptcy even if its only remaining property – the Taj Mahal – is closed.
“The court should not devote its time and resources…to a plan process that is dead on arrival,” the objection says, according to the news source. Trump Entertainment attorneys did not respond to Journal requests for comment.
The resort owned by Donald Trump has been in hot water for some time now. So why not check out some of my previous posts regarding this hotel/casino’s bouts with bankruptcy:
- Trump Entertainment Loses Anti-Pensioner Bid
- Judge Allows Trump Taj Mahal To Void Union Contract
- Taj Mahal Casino of Atlantic City May File For Bankruptcy
- Trump Entertainment Seeks To Stop Pension Payments
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Author: Donald M. Pepe
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
Author: Marc J. Comer
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Author: Jay McDaniel
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls
For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]
Author: George McGowan
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Author: Donald M. Pepe
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Author: Donald M. Pepe
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.