cahn Attorney Edward Weisfelner said in court today that the billionaire’s legal team was studying the April 12 legal opinion giving Trump’s bondholder allies the right to try to bring Trump Entertainment Resorts Inc. out of bankruptcy. “We are obviously disappointed in the decision,” Weisfelner said. “We will reserve and pursue our rights.”
The comments were the first public reaction from Icahn since a judge ruled against his reorganization proposal for Trump Entertainment, the owner of casinos in Atlantic City, New Jersey. The judge sided with bondholders and Donald and Ivanka Trump, who bid us$ 225 million for the casinos. Icahn, who holds the us$ 486 million mortgage on Trump Entertainment Resorts, wanted to swap that debt for ownership of the company.
During today’s hearing in Camden, New Jersey, Icahn dropped his opposition to a new bankruptcy loan that would keep Trump Entertainment operating while the bondholders prepare a rights offering to help fund their court-approved us$ 225 million takeover of the casinos. That us$ 45 million loan would be junior to the us$ 480 million in bank debt that Icahn bought from Texas banker Andy Beal. Icahn’s losing proposal for Trump Entertainment was built around trading that bank debt for equity in the gambling company.
Icahn cannot appeal the decision in favor of Trump and his allies until U.S. Bankruptcy Judge Judith H. Wizmur issues a formal order. Wizmur, who disclosed her legal findings this week, hasn’t yet filed the order needed to make the ruling final.
The casinos will continue operating with the proposed new loan as well as cash set aside as collateral for the Icahn bank debt. The bondholders are led by Marc Lasry of Avenue Capital Group. The case is In re TCI 2 Holdings LLC, 09-13654, U.S. Bankruptcy Court, District of New Jersey (Camden). A Trump lawyer predicts Icahn's appeal will fail.