Carl Icahn and Dallas-based Beal Bank have 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 are also claiming that while Trump Entertainment Resorts project that their earnings will rise 47 percent after bankruptcy, the company has a track record of giving flawed projections. Icahn and Beal bank argued that the debtors missed their projections in nine out of ten times and that the projections were based solely on the hope that the economy would improve. However, Bankruptcy Judge Judith Wizmur said in her ruling that while the proposed Icahn-Beal bankruptcy plan would eliminate Trump Entertainment's debt, it would also wipe out investors and would not benefit from the use of the Trump brand. She also noted that the Icahn-Beal bankruptcy plan may leave the company vulnerable to additional litigation, rebranding costs and business disruptions which might make it impossible for the company to survive after bankruptcy