Donald Trump Beats Carl Icahn in Bankruptcy Court
What happens when two investor icons go at it in bankruptcy court? Well, in this case Donald Trump beat Carl Icahn in bankruptcy court in a battle over Trump Casinos.
The Trump name is an iconic brand. “The Don” puts it on everything and often sells those things with the rights to his name. The classic example is the Trump Casinos. He owned them years ago, but sold them at a discount in a corporate bankruptcy proceeding. Since then, they’ve been owned by others, but couldn’t survive the Great Recession without heading back into court.
Carl Icahn is a major force in the world of publicly traded companies. He is known for buying into companies and forcing the board to take actions that maximize the value of his shares, but which might not necessarily be good in the long run for the company. To say he is controversial is a minor understatement.
The bankruptcy of the Trump Casinos set up an interesting clash. Both Trump and Icahn wanted to be part of the new ownership group. Both were putting together very different plans to buy the properties. The war between them became particularly heated because Trump threatened to pull his name from the casinos. Icahn needed to keep the brand on the casinos, so he was left in a position where it was difficult to be aggressive against “the Don.”
At the end of the day, the decision came down to money. The plan put together by Donald Trump provided more financial incentive for the creditors of the casinos than what Icahn was offering up. Guess which ones the creditors chose? Yep, they went with Trump and his ownership group. At the end of the process, Donald Trump will end up with roughly 10 percent of the ownership of the casinos with the rest going to his fellow investors and creditors in the casino.
It is rare that you see two icons really go at it so publicly. The public nature of the bankruptcy court made this one of those battles, a fight that Trump clearly won.