Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comTrump Taj Mahal may close Dec. 12, union protesting
Author: Joel R. Glucksman|December 4, 2014
Trump Taj Mahal may close Dec. 12, union protesting
Despite the view of some analysts that the Trump Taj Mahal is close to insolvency, there is no shortage of argument over what is to be done about the casino.
Trump Entertainment Resorts has announced, in a disclosure statement filed in bankruptcy court, that it expects to close down the Trump Taj Mahal by Dec. 12, according to Forbes. The company filed for protection under Chapter 11 of the bankruptcy law just a few months ago in order to reorganize via a debt-for-equity deal with billionaire Carl Icahn. That plan has been hotly contested by some affected parties.
In a separate filing, the unsecured creditors’ committee sought to terminate the company’s exclusive period to file a plan of reorganization so that it could file its own, according to the news source. The committee plan would transfer the collateral that secures the company’s first-lien debt to the owner of that debt, which is controlled by Icahn. It would then pay administrative and priority claims out of the company’s $30 million of cash on hand before transferring the rest of the assets to a liquidating trust for distribution to unsecured creditors. This would include Icahn’s first-lien deficiency claim.
Icahn’s plan, which is backed by the company, is significantly different, according to Forbes. This plan would give unsecured creditors just $1 million to split and allow Icahn to exchange his first-lien claim for full ownership in the reorganized company. While the casino would likely still close, Icahn would be able to use the company’s tax attributes. Namely, these include $450 million of federal net operating losses and $850 million of state net operating losses.
Bankruptcy Judge Kevin Gross did not approve the company’s disclosure statement at the hearing, but ordered it to submit a revised draft Nov. 18, the news source reported.
Union protests
Meanwhile, more than 17,000 state legislators, officials, council members and mayors are expected to turn out for the annual New Jersey League of Municipalities convention, and the leader of Unite 54, the union representing Atlantic City’s hotel and casino workers, hopes that they will join him in protesting against Carl Icahn, according to The Inquirer. Speaking through the news source, Robert McDevitt urged the leaders not to patronize the Trump Taj Mahal or the Tropicana Casino & Resort, and instead, march along the boardwalk with union members on Nov. 19 at 5 p.m.
McDevitt told the news source that many leaders have been supportive because of the cost to the state that could result from the deal.
“It’s not just our members who are hurt,” said McDevitt. “If they go on Medicaid, it’s a direct cost to the state.”
Trump Taj Mahal may close Dec. 12, union protesting
Author: Joel R. Glucksman
Despite the view of some analysts that the Trump Taj Mahal is close to insolvency, there is no shortage of argument over what is to be done about the casino.
Trump Entertainment Resorts has announced, in a disclosure statement filed in bankruptcy court, that it expects to close down the Trump Taj Mahal by Dec. 12, according to Forbes. The company filed for protection under Chapter 11 of the bankruptcy law just a few months ago in order to reorganize via a debt-for-equity deal with billionaire Carl Icahn. That plan has been hotly contested by some affected parties.
In a separate filing, the unsecured creditors’ committee sought to terminate the company’s exclusive period to file a plan of reorganization so that it could file its own, according to the news source. The committee plan would transfer the collateral that secures the company’s first-lien debt to the owner of that debt, which is controlled by Icahn. It would then pay administrative and priority claims out of the company’s $30 million of cash on hand before transferring the rest of the assets to a liquidating trust for distribution to unsecured creditors. This would include Icahn’s first-lien deficiency claim.
Icahn’s plan, which is backed by the company, is significantly different, according to Forbes. This plan would give unsecured creditors just $1 million to split and allow Icahn to exchange his first-lien claim for full ownership in the reorganized company. While the casino would likely still close, Icahn would be able to use the company’s tax attributes. Namely, these include $450 million of federal net operating losses and $850 million of state net operating losses.
Bankruptcy Judge Kevin Gross did not approve the company’s disclosure statement at the hearing, but ordered it to submit a revised draft Nov. 18, the news source reported.
Union protests
Meanwhile, more than 17,000 state legislators, officials, council members and mayors are expected to turn out for the annual New Jersey League of Municipalities convention, and the leader of Unite 54, the union representing Atlantic City’s hotel and casino workers, hopes that they will join him in protesting against Carl Icahn, according to The Inquirer. Speaking through the news source, Robert McDevitt urged the leaders not to patronize the Trump Taj Mahal or the Tropicana Casino & Resort, and instead, march along the boardwalk with union members on Nov. 19 at 5 p.m.
McDevitt told the news source that many leaders have been supportive because of the cost to the state that could result from the deal.
“It’s not just our members who are hurt,” said McDevitt. “If they go on Medicaid, it’s a direct cost to the state.”
