Bondholders call Trump casino buyback plan a "brazen insider deal," seek examiner

On August 11, 2009, an ad hoc committee holding $1.25 billion of Trump Entertainment Resorts' second-lien notes filed a motion in the U.S. Bankruptcy Court in Camden asking Judge Judith Wizmur to terminate the debtors' plan exclusivity and block the reorganization plan filed August 3, under which Donald Trump, Ivanka Trump, and Beal Bank would reacquire the three Atlantic City casinos for $100 million while noteholders received roughly $13.9 million and unsecured creditors and equity holders received nothing. In court documents the bondholders called the proposed sale "a brazen insider deal," alleged the company had settled on the Trump/Beal outcome as early as April, and asked the judge to appoint a special examiner to investigate the conduct of Trump Entertainment officials before and during the bankruptcy; bondholder attorney Kristopher Hansen said the plan "benefits two people -- Andy Beal and Donald Trump" while providing creditors nothing. The committee proposed a competing $175 million offer for the casinos plus completion of a $75 million sale of Trump Marina. Trump told the Associated Press on August 12 that his deal would prevail because the board members who approved it had been appointed by the bondholders; CEO Mark Juliano said the company welcomed "any inspection of the process." The exclusivity-termination motion date of August 11 is confirmed in the company's SEC Form 10-Q; the AP coverage carrying the quotes ran August 12.

“The board members who approved that deal were appointed by the bondholders. The people who served as the bondholders' representatives are the ones who approved this deal because it was the better deal.” Quote verified against source