Carl Icahn and Dallas-based Beal Bank are continuing to fight for control of the three Trump Entertainment Resorts casinos in Atlantic City.
On Monday they appealed a bankruptcy court ruling that would give ownership of the casinos to Donald Trump, his daughter, Ivanka Trump, and company bondholders.
Icahn and the bank claim the bankruptcy court made several mistakes in ruling against them.
The Trumps and the bondholders, led by New York-based Avenue Capital Group, offered $225 million for the company.
Icahn and the bank wanted to swap the $486 million mortgage he holds on the company for ownership of it. They note in the appeal that the court admitted their plan was more likely to succeed than the Trumps'.
Icahn's main argument is that the current plan is doomed. In court papers, Icahn and Beal Bank question whether the Trumps and the bondholders have enough money "to survive beyond a few months."
They claim Trump Entertainment is forecasting that its earnings will rise 47 percent by next year based on an expectation that the economy will improve.
They note the company already fell $6.6 million short of its projections for the first quarter and that the company has a $310 million loan due in 2015.
"It was uncontroverted that the debtors have missed their projections in nine out of the last 10 years, by an average of 21 percent," Icahn and the bank wrote in their appeal. "The record simply does not sustain a finding that projections including such a dramatic spike in (earnings are) achievable, particularly in light of the historical performance of these debtors."
Mark Juliano, Trump Entertainment's CEO, said the company is confident Judge Judith Wizmur's decision in favor of the Trumps and the bondholders will be upheld.
"The judge's ruling was very careful and well thought-out," he said.
In the first quarter, Juliano said, the company — like all other casino operators in Atlantic City — was slammed by three major snowstorms that kept gamblers away.
Under the current ruling, the company's bondholders will own most of it. The Trumps will get a 10 percent stake, mainly in return for the continued use of their name.
Wizmur wrote in her ruling that the Icahn-Beal plan was more feasible because it would eliminate Trump Entertainment's debt.
But it would have wiped out investors, who recover some equity under the Trump-bondholder plan. And the company "would continue to benefit from the use of the Trump brand, and the future support of Donald and Ivanka Trump, free from potential litigation, rebranding costs and disruptions, and the associated business risks with losing the brand," Wizmur wrote.
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