The ad hoc creditors committee filed its objection Wednesday in the U.S. Bankruptcy Court for the District of New Jersey, three months after Trump submitted claims that TER owes him “substantially in excess of $100 million” for breaching a trademark licensing agreement and damaging his reputation.
TER filed for bankruptcy in February, listing debts of more than $1 billion and assets believed to be somewhere between $0 and $50,000, according to court papers.
Trump resigned as chairman of the board shortly before the filing amid in-fighting over the future of the casino, with bondholders spurning Trump's offer to buy the business and threatening to pursue involuntary bankruptcy if TER did not file on its own.
Trump claims that TER mismanaged the casino, leading to complaints from customers and poor online reviews and damaging Trump's reputation to the tune of $100 million or more.
But the committee called Trump's claims “an attempt to exert even more leverage over the debtors' cases than he has already."
The claims do not “state a use of licensed marks” and therefore “do not articulate a breach” of the trademark licensing agreement he signed with TER, the committee contends.
Even if the debtors had breached the agreement, the committee says, they would not owe damages to Trump.
The agreement “provides that Mr. Trump's sole and exclusive remedy” for a breach is to “maintain an action in the District Court for the Southern District of New York for declaratory judgment and/or injunctive relief,” the committee said.
Donald Trump isn't the only Trump making claims against TER.
Trump's daughter, the fashion model, jewelry designer and Trump Organization Executive Vice President Ivanka Trump, submitted proofs of claim in May for misappropriation of image.
Ivanka Trump says TER continued to use her likeness for advertising purposes even after she resigned from the Board of Directors in February.
The ad hoc committee objected Wednesday to that claim, as well, saying Ivanka Trump failed to allege that she "was damaged by the debtors' use of her image."
The uproar over the claims follows a controversial reorganization plan submitted earlier this month by the debtors that would restructure $488 million in first-lien debt to Beal Bank while providing nothing for holders of $1.25 billion in senior secured notes and $3.3 million in unsecured claims.
The ad hoc committee this week urged the court to terminate the exclusivity period for the plan, which essentially abolishes claims by everyone but Donald Trump and Beal Bank, and allow the noteholders to present a more balanced alternative, according to the committee.
Attorneys for Donald Trump declined to comment on the claims Thursday.
Lawyers for the ad hoc committee, in court Thursday, could not be reached for comment.
The ad hoc committee is represented by Lowenstein Sandler PC and Stroock & Stroock & Lavan LLP.
TER is represented by McCarter & English LLP and Weil Gotshal & Manges LLP.
Attorneys from Brown & Connery LLP and Kasowitz Benson Torres & Friedman LLP represent Donald and Ivanka Trump.
The case is In re: TCI 2 Holdings LLC et al., case number 09-13654, in the U.S. Bankruptcy Court for the District of New Jersey.
--Additional reporting by Samuel Howard and Anne Urda
