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TRUMP ENTERTAINMENT RESORTS, INC.
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(Exact Name of Registrant as Specified in Charter)
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Delaware
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(State or Other Jurisdiction of Incorporation)
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1-13794
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13-3818402
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(Commission File Number)
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(IRS Employer Identification No.)
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15 South Pennsylvania Avenue
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Atlantic City, New Jersey
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08401
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(Address of Principal Executive Offices)
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(Zip Code)
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609-449-5866
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(Registrant’s Telephone Number, Including Area Code)
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Confirmation Appeal - Beal Bank and Icahn Partners (collectively, the “First Lien Lenders”) appealed the Bankruptcy Court’s May 7, 2010 order (the “Confirmation Order”) confirming the Plan of Reorganization, which was entered after a nine-day confirmation trial held during the first quarter of 2010. That appeal (the “Confirmation Appeal”), titled Beal Bank, S.S.B. v. Ad Hoc Committee, Case No. 10-03120 (RBK) (D.N.J. 2010), is currently pending before the United States District Court for the District of New Jersey. In connection with the Confirmation Appeal, the First Lien Lenders raised numerous issues involving, among others, feasibility, cramdown, market rate of interest, the application of section 1111(b) of the Bankruptcy Code, and the reasonableness of the settlement agreement with Donald J. Trump. The Reorganized Debtors moved to have the Confirmation Appeal dismissed on various grounds, including equitable mootness.
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Recharacterization Motion - Prior to confirmation of the Plan of Reorganization, the Debtors filed a motion and certain other related pleadings in the Bankruptcy Court seeking, among other things, to recharacterize a portion of the cash payments paid to the First Lien Lenders during the pendency of the bankruptcy case pursuant to the Final Cash Collateral Order (as defined in the Settlement Agreement) as a repayment of principal of their prepetition loans. Whether recharacterization is appropriate and, if so, the amount to be recharacterized, were to have been the subject of proceedings before the Bankruptcy Court.
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CRDA Lawsuit - On May 28, 2010, prior to the Plan Consummation Date, the First Lien Lenders commenced an adversary proceeding in the Bankruptcy Court, titled Beal Bank, S.S.B. as Administrative Agent, Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II LP, and Icahn Partners Master Fund III LP v. Trump Marina Associates, LLC, Trump Plaza Associates, LLC and Trump Taj Mahal Associates, LLC, Case No. 10-01688 (JHW) (Bankr. D.N.J. 2010), asserting that certain of the Debtors’ proposed transactions with the New Jersey Casino Reinvestment Development Authority (the “CRDA”) violated the Prepetition First Lien Credit Agreement and the Final Cash Collateral Order (the “CRDA Lawsuit”). Pursuant to these proposed transactions, as part of the CRDA’s credit donation program, the Debtors were to receive a cash payment of approximately $9.6 million from the CRDA in exchange for a donation of approximately $18.8 million in previous deposits made by the Debtors to the CRDA (the “CRDA Transaction”). Following commencement of this proceeding by the First Lien Lenders, the Debtors agreed not to take any further steps to consummate such transactions until after the Plan Consummation Date, and filed a counterclaim seeking a declaratory judgment that the CRDA Transaction is permitted under the terms of the Amended and Restated Credit Agreement. These issues were to have been determined by the Bankruptcy Court.
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Fee Objections – The Debtors filed a number of objections to certain demands made by the First Lien Lenders for reimbursement of professional fees incurred in connection with the Debtors' chapter 11 cases.
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Prepayment Disallowance Motion - Prior to the Plan Consummation Date, the First Lien Lenders asserted that the $125 million cash payment to be received by them on the Plan Consummation Date in accordance with the terms of the Plan of Reorganization would trigger an obligation of the Debtors or Reorganized Debtors to pay a $4.2 million prepayment premium under the Prepetition First Lien Credit Agreement and the Final Cash Collateral Order. In response, the Reorganized Debtors filed a motion in the Bankruptcy Court seeking the disallowance of any prepayment premium asserted.
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Administrative Expense Claims - The First Lien Lenders submitted a formal request to the Reorganized Debtors for payment of administrative expense claims on account of certain purported adequate protection claims they have asserted for diminution in the value in their prepetition collateral. The Reorganized Debtors dispute these amounts.
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Intercreditor Lawsuit - Prior to the confirmation hearing, Beal Bank filed a lawsuit (the “Intercreditor Lawsuit”) in New York state court against the members of the ad hoc committee (the “Ad Hoc Committee”) of holders of the Debtors’ 8.5% Senior Secured Notes due 2015 (the “Senior Notes”), asserting breaches of the Intercreditor Agreement, dated December 21, 2007, between Beal Bank and U.S. Bank National Association, as indenture trustee for the Senior Notes (the “Intercreditor Agreement”). Among other things, Beal Bank sought a declaratory judgment that the members of the Ad Hoc Committee violated the Intercreditor Agreement by (1) objecting to a competing plan of reorganization filed by Beal Bank and Icahn Partners and prosecuting their own plan of reorganization, and (2) seeking recharacterization of payments made to the First Lien Lenders during the Debtors’ chapter 11 cases. In addition, the Intercreditor Lawsuit requested an award of money damages for such alleged violations of the Intercreditor Agreement. Following a transfer in venue, the Intercreditor Lawsuit, titled Beal Bank, S.S.B., as First Lien Collateral Agent v. U.S. Bank National Association, et al., Case No. 10-01769 (JHW), is currently pending before the Bankruptcy Court. The Ad Hoc Committee moved to dismiss the Intercreditor Lawsuit.
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the Amended and Restated Credit Agreement will be deemed to be amended pursuant to a Third Amendment to Amended and Restated Credit Agreement (the “Third Amendment”), as described below, the executed Third Amendment will be released from escrow, and new promissory notes, giving effect to the Third Amendment, will be issued under the Amended and Restated Credit Agreement, in substitution for the promissory notes originally issued on the Plan Consummation Date;
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Beal Bank and the Icahn Parties will execute and file Stipulations of Dismissal with respect to the Litigation Matters relating to the Plan of Reorganization described above. Upon the filing of such Stipulations of Dismissal, the First Lien Lenders will not have any right or ability to pursue such litigation and the claims asserted therein will be dismissed with prejudice. In return, the Reorganized Debtors will not have any right, ability or claim to recharacterize or impair any amounts paid or payable to the First Lien Lenders with respect to any amounts paid or payable on or prior to the Plan Effective Date pursuant to the Final Cash Collateral Order, the Plan of Reorganization, or the Prepetition First Lien Credit Agreement;
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the First Lien Lenders will agree not to seek any prepayment premiums, penalties, or fees from the Debtors or the Reorganized Debtors arising under or resulting from the Plan of Reorganization or the transactions consummated pursuant to the Plan of Reorganization;
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the First Lien Lenders will support the payment of all the Debtors’ professional fees and expenses relating to the Debtors’ chapter 11 cases, and the payment of any and all fees, costs and expenses, asserted in the fee application filed by the Ad Hoc Committee;
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the First Lien Lenders will consent to the CRDA Transaction and agree that all cash received by the Reorganized Debtors in connection with the CRDA Transaction will be retained by the Reorganized Debtors and will not be included in the calculation of available cash flow or net cash proceeds for purposes of the Amended and Restated Credit Agreement or be required to be used to prepay the loans under the Amended and Restated Credit Agreement;
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the Reorganized Debtors will make a $15 million payment to Icahn Partners, which will satisfy any and all obligations of the Reorganized Debtors under the Prepetition First Lien Credit Agreement to reimburse, advance or indemnify costs, fees, and expenses (including professional fees) incurred by the First Lien Lenders. Upon such payment, the First Lien Lenders will release and discharge the Debtors and the Reorganized Debtors from and against any and all liabilities or obligations incurred by such parties; and
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each party will mutually waive, release and discharge, each other party (among others) from all claims and proceedings arising from, related to, or in any way connected with the matters which are currently in litigation relating to the Plan of Reorganization and the Debtors’ chapter 11 cases.
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ITEM 5.02
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DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
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TRUMP ENTERTAINMENT RESORTS, INC.
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By:
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/s/ Robert M. Pickus | |
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Robert M. Pickus
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Chief Administrative Officer, Secretary and General Counsel
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Exhibit No.
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Description
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10.1
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Global Settlement Agreement dated as of September 21, 2010 (with exhibits).
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