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
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Author: Donald M. Pepe
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
Author: Jay McDaniel
The Legal Implications of Signing a Triple Net Lease
A triple net lease is a commercial lease in which the tenant pays the property’s real estate taxes, insurance, and maintenance costs, known as the three nets, in addition to base rent. They are most often used in freestanding retail and office buildings and in large single-tenant industrial properties, with terms that typically run 10 […]
Author: Donald M. Pepe
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
Types of Business Law Services Companies Actually Use
Business law services are legal services that help companies form, operate, transact, protect assets, manage risk, and resolve disputes. The phrase can sound broad because it is broad. A company may need help with entity formation one month, contract review the next, a commercial lease after that, and a business dispute later in the year. […]
Author: Scarinci Hollenbeck, LLC
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.