.S. Bankruptcy Judge Judith Wizmur yesterday gave Trump 10 days to file a motion asking her to reconsider her ruling, which also applies to Beal Bank, the lender Trump is working with to try to take over Trump Entertainment. The so-called 2019 disclosure requirement grew out of a fight between noteholders of Trump Entertainment and Trump for control of the casino company.
The noteholders must also comply with the ruling, Trump lawyer David Friedman said in an interview. Trump hasn’t been involved in any debt trading in this case and intends to comply with the ruling, Friedman said. “We have nothing to hide,” he said. “This is not an issue for us.”
The disclosure rule is one that distressed debt investors, particularly hedge funds, have long fought against, said bankruptcy attorney Edward Weisfelner, with the law firm of Brown Rudnick Berlack Israels LLP.
“Distressed debt guys don’t like to telegraph to the world what they paid,” said Weisfelner, who fought disclosure on behalf of bondholders in the bankruptcy of casino company Herbst Gaming. Noteholders attorney Kristopher M. Hansen didn’t immediately return a call seeking comment yesterday.
Trump, who once owned 29 % of the company, resigned from the board before it filed for court protection on February 17. He has abandoned his equity interest in the company, according to court papers. Trump and the noteholders group are vying for control of Atlantic City, New Jersey-based Trump Entertainment should it successfully reorganize and exit bankruptcy.
Noteholders have offered to cancel as much as us$ 1.25 billion in debt owed to them in exchange for 95 % of Trump Entertainment. They plan to raise us$ 225 million by selling new stock in the company. One of its three casinos, the Trump Marina Hotel, would be sold for us$ 75 million under the plan.
Under Trump’s plan, Trump and Beal Bank would invest us$ 114 million and Beal would extend the maturity of a us$ 486 million loan it made to Trump Entertainment before the bankruptcy. Beal Bank is owned by Andy Beal, a Dallas businessman and a high-stakes poker player. The case is In re TCI 2 Holdings LLC, 09-13654, U.S. Bankruptcy Court, District of New Jersey (Camden).