Unsecured creditors are balking at Trump Entertainment Resorts Inc.’s proposed bankruptcy exit plan, calling it a “charade” and a power play by Carl Icahn to preserve hundreds of millions of dollars in tax credits for his benefit, the Wall Street Journal reported today. Unlike most bankruptcy plans that look to secure votes from a variety of creditors, Trump Entertainment has said that the only vote that matters is that of Icahn, the billionaire activist investor who controls the secured debt of the Atlantic City, N.J., boardwalk gambling operation. A hearing is scheduled to take place tomorrow to win a court’s approval for the voting scheme. The chapter 11 plan calls for Icahn’s companies to swap out some of their Trump Entertainment debt for a controlling equity stake in a reorganized company as well as for new debt. Additionally, Icahn’s affiliates will invest $100 million to get the ailing gambling operation on its feet, court papers say.
