Jan 4 (Reuters) - Billionaire Carl Icahn and Beal Bank filed a competing reorganization plan for Trump Entertainment Resorts (TRMPQ.PK), which offers a $45 million loan to the bankrupt casino operator, court documents showed.
Icahn and Beal Bank said they were also willing to put up an additional $50 million as penalty if this plan or any other plan supported by them does not go effective within 270 days from confirmation due to lack of any regulatory approvals.
The plan includes a proposal for a $225 million rights offering, of which $80 million would be used by the company as additional working capital.
The current reorganization plan, filed by the casinos' bondholders and backed by Donald Trump and his daughter Ivanka, if confirmed, will jeopardize the estates as it will leave the company with an over-leaveraged balance sheet and inadequate liquidity, Icahn and Beal Bank said in a filing last Wednesday.
The bondholders' plan would give Trump a 10 percent stake in the company and leave his name on the casinos.
Icahn bought a 51 percent stake last month in Trump Entertainment's first-lien bank debt worth about $485 million. Icahn also has rights to buy the remaining 49 percent stake.
Trump Entertainment filed for Chapter 11 bankruptcy in February 2008 as regional competition and a drop in consumer spending hurt the its three Atlantic City casinos. It is the third plunge into bankruptcy for the company.
The case is In re: TCI 2 Holdings, LLC, U.S. Bankruptcy Court, District of New Jersey, No. 09-13654. (Reporting by Santosh Nadgir in Bangalore; Editing by Unnikrishnan Nair)