Atlantic City casino operator Trump Entertainment Resorts may have spied a light at the end of its bankruptcy tunnel after creditors reached a deal on a restructuring plan.
Trump Entertainment filed for bankruptcy last September, shutting down the Trump Plaza casino that same month. The Trump Taj Mahal remains open only because principal creditor Carl Icahn floated the company a $20m emergency loan in December.
On Thursday, a panel representing Trump Entertainment’s unsecured creditors reached a deal that attorney Karen Giannelli said “allows us to support the [restructuring] plan.” Under the previous plan, Icahn would receive equity in the restructured company while unsecured creditors would have split $1m between them, representing a recovery rate of less than 1%. Bloomberg News reported that the new plan boosts the unsecured creditors’ payout to $3.5m.
While the creditors committee has signed off on the plan, the individual creditors are under no obligation to accept. The plan also doesn’t prevent casino workers union Unite Here Local 54 from continuing its appeal of the court order stripping Taj Mahal’s unionized employees of their existing benefits and health care plan.
JUDGE KILLS REVEL SALE, CASINO CAN KEEP STRAUB’S $10M DEPOSIT
Meanwhile, the long sorry saga of the Revel Hotel and Casino took yet another downturn on Thursday as a bankruptcy court gave the property permission to put itself back on the market. Revel now hopes to find another sucker willing to pick up AC’s white elephant on the cheap but there are no firm offers on the table and Revel will be forced to liquidate if no buyer materializes within the next five months.
Launched in April 2012, the $2.4b Revel declared bankruptcy for the second time last June. The property was sold at auction to Brookfield Asset Management for $110m, but the company walked away from the deal a month later after failing to reach a deal with the dedicated power company that supplies Revel with juice. Florida developer Glenn Straub then snapped up Revel for $95.4m but Straub couldn’t make nice with Revel’s tenants and the deal’s timeline expired.
On Thursday, US Bankruptcy Judge Gloria Burns dealt Straub a further blow by saying Revel could keep Straub’s $10m deposit. On Feb. 25, Revel will seek the court’s permission to use these funds to pay its bills. Straub’s attorney Stuart Moskovitz said his boss would appeal the deposit forfeiture.
If nothing else, Straub’s misfortune at least opens up the possibility that Revel will once again become a casino. In September, Straub raised eyebrows with his plan to convert Revel into an educational facility for “free, white and over 21” students.