Bankruptcy wrangling for ex-Trump, Revel casinos

ATLANTIC CITY — Some of the hottest action in Atlantic City involves closed casinos in bankruptcy court, where Donald Trump is trying to recoup rent he paid on a driveway and the city is fighting to collect more than $50 million in unpaid taxes.

In the Trump matter, the real estate developer is pressing a claim against part of a company he once ran, seeking to get back more than $147,000 in rent he paid to the landlord of the driveway leading to the former Trump Plaza casino, which closed on Sept. 16.

Despite maintaining that a division of Trump Entertainment Resorts — the company he once ran but no longer has anything to do with aside from a 10 percent ownership stake — actually owes the money, Trump paid the debt to the landlord and is now seeking to get it back from Trump Entertainment. In the court filing and in a letter to the landlord, R&R Associates, Trump said he was paying the rent “in order to avoid litigation for the moment.” A copy of the check was included with the filing.

Trump says he “is entitled to be reimbursed by the debtor,” Trump Entertainment.

The company had no immediate comment on Trump’s claim.

It is only one of the legal battles between the onetime casino king and the company he once ruled.

Trump and his daughter, Ivanka, are suing Trump Entertainment, trying to force the company to remove the Trump name from the Plaza building as well as the still-operating Taj Mahal Casino Resort, which is scheduled to close Dec. 12. The Trumps claim the properties were allowed to fall into disrepair and violate a quality agreement, thus harming the Trumps’ personal brand.

Trump Entertainment has removed the Trump name from most — but not all — of the Plaza, and has thus far refused to strip it from the Taj Mahal, its lone remaining casino.

The bankrupt Trump Taj Mahal casino expects to run out of cash by mid-January and is seeking new financing to get it through its Chapter 11 case.

On Wednesday, Trump Entertainment Resorts asked a Delaware bankruptcy court to approve $5 million in debtor-in-possession financing from billionaire Carl Icahn to keep it afloat during the case.

The company plans to close the Taj Mahal on Dec. 12, unless its union drops an appeal of a court order that ended health care and pension plans for workers.

Ongoing talks have yet to result in agreement that would keep the casino open.

Trump Entertainment says it expects to burn through all its remaining cash by Jan. 16 — a month later than a previous estimate.

On Tuesday, a Delaware bankruptcy court judge approved a deal between Atlantic City and Trump Entertainment permitting the city to hold a tax sale of the $24 million in unpaid taxes the company owes. That is a legal maneuver in which an investor in effect buys a lien against the property and pays the taxes due on it. The investor gets paid when the property owner pays off the tax debt; if that doesn’t happen, the investor can foreclose in two years.

But Tuesday’s deal also explicitly preserves the company’s right to appeal the amount of its unpaid 2014 taxes.

The Trump tax sale is scheduled for Dec. 11 — the day before the Taj Mahal closes.

On Monday, the former Revel moved to block Atlantic City from collecting $32 million in unpaid property taxes. The owners of Revel, which closed on Sept. 2, filed an appeal of a bankruptcy court order letting Atlantic City hold a tax sale of the unpaid debt.

Complicating things is the fact that a deal to sell the property to a Canadian firm for $110 million fell apart last week. Proceeds from that sale were expected to be used to pay off the back taxes. Now that the sale is off, however, a tax sale appears to be the only way Atlantic City can recoup those taxes, which account for about 18 percent of the city’s budget this year.