17-August-2009

Trump Entertainment Resorts (TRMPPQ.PK) bondholders filed a motion Tuesday rejecting Donald Trump’s offer to take the bankrupt company private. According to Reuters, bondholders hope to submit a rival plan that “offers them greater recovery.”

Trump proposed to buy the company for $100 million last week with the backing of BNAC Inc., an affiliate of Beal Bank Nevada. Lawyers representing the company’s bondholders have filed a motion to terminate the company’s exclusive right to propose and seek approval for reorganization plans.

In the motion the bondholders’ lawyers argued that Trump Entertainment had not explored other options besides that which Trump and BNAC offered.

"The debtors' plan benefits two people, Andy Beal and Donald Trump, and ignores the legal rights of $1.25 billion of notes and all unsecured creditors by providing them with nothing," bondholder representative Kristopher Hansen said.

Under their rival plan, bondholders would give the company an additional $175 million in capital as a rights offering. The rival plan also includes a provision to sell the Trump Marina, one of Trump Entertainment’s three Atlantic City properties, to Coastal Development LLC for $75 million.

The rival plan, Hansen said, “provides a recovery to all note holders and all unsecured creditors and pays Beal Bank a significant amount of cash."

Lawyers have also filed a motion requesting the U.S. Bankruptcy Court of New Jersey appoint an examiner to "investigate a number of issues concerning the conduct of the debtors before and during their bankruptcy," Hansen said.

By: Phill Provance
phill.provance@acehoyle.com

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