In re Resorts Intern., Inc.
| Decision Date | 16 August 1990 |
| Docket Number | 89-10120,89-10461 and 89-10462.,Bankruptcy No. 89-10119 |
| Citation | 145 BR 412 |
| Parties | In re RESORTS INTERNATIONAL, INC., Resorts International Financing, Inc. Griffin Resorts Holding, Inc., Griffin Resorts, Inc., Debtors. |
| Court | U.S. Bankruptcy Court — District of New Jersey |
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Ravin, Sarasohn, Cook, Baumgarten, Fisch & Baime by Robert A. Baime, Sharon L. Levine, Roseland, N.J., Gibson, Dunn & Crutcher by Stephen A. Kaplan, Bennett Silverman, Peter C. Rockwell, New York City, for debtors.
Shanley & Fisher by A. Dennis Terrell, Robert K. Malone, Morristown, N.J., Jones, Day, Reavis & Pogue by Marc S. Kirschner, Craig S. Gatarz, Peter Leib, New York City, for Combined Official Bondholder Committee of Resorts Intern., Inc. and Resorts Intern. Financing, Inc.
Wolff & Samson by Robert E. Nies, Roseland, N.J., Stutman, Treister & Glatt, P.C. by Kenneth N. Klee, Susan R. Purcell, Los Angeles, Cal., for Griffin Resorts, Inc., Noteholders Committee.
Gendel, Raskoff, Shapiro & Quittner by Bernard Shapiro, Sheri A. Bluebond, Los Angeles, Cal., for Merv Griffin.
Miller, Marvin, Dunham, Doering & Schreiber by Valerie J. Munson, Philadelphia, Pa., for Merv Griffin and Griffco Resorts Holding.
Willkie, Farr & Gallagher by Richard L. Posen, Myron Trepper, Sharon Schneier, New York City, for Trump Litigation defendants.
Wolf, Block, Schorr & Solis-Cohen by Marc L. Alderman, Philadelphia, Pa., for Trump defendants.
Schnader, Harrison, Segal & Lewis by Christine S. Levin, Philadelphia, Pa., for Bariscillo, Druz and Sviridoff.
Wilentz, Goldman & Spitzer by Anne S. Babineau, Francis X. Chiaffiotte, Woodbridge, N.J., for Housing Authority and Urban Redevelopment Agency of Atlantic City.
Leonard J. DiGiacomo, Asst. Counsel, State of N.J., Casino Control Com'n.
Mary Jo Flaherty, Deputy Atty. Gen., State of N.J., Div. of Gaming Enforcement.
Rosenman & Colin by Carl Diehl, New York City, for Drexel Burnham Lambert.
Greenfield & Chimicles by James R. Malone, Jr., Haverford, Pa., for Objectors to the Plan.
Fred Lowenschuss Associates by Fred Lowenschuss, Philadelphia, Pa., for Certain Resort Debentureholders including Fred Lowenschuss Associates Pension Plan, Fred Lowenschuss, trustee for Lawrence Lowenschuss, Edward Lowenschuss and Alan Lowenschuss and custodian for David Lowenschuss.
Mordecai Rosenfeld, P.C. by Mordecai Rosenfeld, New York City, for Kenwood Dual Fund, Ltd.
Before the Court is the Debtors' Second Amended Joint Plan of Reorganization under Chapter 11 of the United States Bankruptcy Code ("the Plan") dated May 31, 1990 submitted by Resorts International, Inc., ("Resorts"), Resorts International Financing, Inc., ("RIFI"), Griffin Resorts, Inc., ("GRI") and Griffin Resorts Holding, Inc., ("GRH"), all debtors herein collectively referred to as "Debtors", together with Resorts International Hotel, Inc. ("RIH"), Griffco Resorts Holding, Inc., (formerly known as The Griffin Company) ("TGC"), and Merv Griffin ("Griffin"), collectively referred to as the "Proponents."
Objections to confirmation of the Plan have been filed by Mr. Arthur M. Friedman, C.P.A., ("Friedman"), Mr. Ernest L. Rahm, ("Rahm"), Greenfield and Chimicles, ("Greenfield"), June Linabury and Howard A. Linabury, ("Linabury"), Fred Lowenschuss Associates, ("Lowenschuss"), the Kenwood Dual Fund, Ltd., ("Kenwood"), the Housing Authority and Urban Redevelopment Agency of the City of Atlantic City ("the Authority"), The New Jersey Casino Control Commission, ("the Commission" or "CCC"), The State of New Jersey, Department of Law and Public Safety, Division of Gaming Enforcement ("the Division of Gaming"), and The Trump Litigation Group, ("Trump"). Hearings on Confirmation of the Plan were conducted on July 24, 25, 26 and 27, 1990. The following constitutes this Court's findings of fact and conclusions of law.
On November 12, 1989, involuntary petitions under Chapter 11 of the United States Bankruptcy Code ("Code") were filed against Resorts and RIFI.
On December 22, 1990, Resorts and RIFI consented to the entry of an order for relief pursuant to Chapter 11 of the Code. On that same date, GRI and GRH filed separate voluntary petitions under Chapter 11 of the Bankruptcy Code. Upon application of the Debtors, on December 22, 1989, this Court entered an order directing the joint administration and consolidation for administrative purposes only of the Resorts, RIFI, GRH and GRI Chapter 11 cases.
Resorts' Disclosure Statement dated May 31, 1990 ("Disclosure Statement") describes the Debtors and their operations as follows:
Resorts' Disclosure Statement Dated as of May 31, 1990 Pursuant to Section 1125 of the Bankruptcy Code, III General Information, A. Corporate Structure, page 7 (D-9).
Prior to the entry of an order for relief in these Chapter 11 cases, Resorts had issued three series of subordinated debentures in the aggregate original principal amount of approximately $380 million (the "RII Debentures"). RIFI, a wholly-owned subsidiary of Resorts, issued one series of subordinated debentures in an original principal amount of approximately $200 million, which Resorts guaranteed as to principal and interest (the RIFI debentures). In addition, GRI, a second tier wholly-owned subsidiary of Resorts issued in 1988 two series of senior secured notes in the aggregate original principal amount of $325 million ("GRI Notes") which were secured by inter alia, liens on and security interests in assets of Resorts' subsidiaries, which own and operate the Atlantic City and Paradise Island casino and hotel properties. Because of shortfalls between their debt service requirements and income from operations, the Debtors on August 28, 1989 announced a proposed reorganization and a moratorium on the payment of interest on the RII/RIFI Debentures and GRI Notes. In the fall of 1989 two unofficial committees were formed to represent the interests of the RII/RIFI Debentures and the GRI Noteholders. After the institution of involuntary bankruptcy proceedings against Resorts and RIFI on November 12, 1989 and the consents by Resorts and RIFI to the entry of orders for relief under Chapter 11 and the filing of voluntary Chapter 11 petitions by GRI and GRH on December 22, 1989, official committees were formed. In January of 1990, the United States Trustee formed two separate official committees to represent the RII/RIFI Bondholders and the GRI Noteholders respectively.
On December 22, 1989 the Debtors filed a Joint Plan of Reorganization. On April 16, 1990 the Debtors filed an Amended Plan of Reorganization together with a Disclosure Statement. Thereafter, the Debtors filed a Second Amended Joint Plan of Reorganization dated as of May 31, 1990 and Disclosure Statement. The Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code to Accompany Debtors' Second Amended Joint Plan of Reorganization Dated as of May 31, 1990 was approved by this Court by Order dated June 14, 1990. That joint plan is presently before the Court for approval.
A basic overview of the Plan which represents a complete reorganization of the Debtors' capital structure and a substantial restructuring of claims of the Debtors' secured and unsecured creditors and the extinguishment of existing equity interests is necessary. As set forth at length in the Debtors' Memorandum of Law in Support of Confirmation, the Plan's basic concepts are as follows:
A. Existing RII/RIFI Debentures and GRI Notes representing an aggregate face amount of approximately $931 million will be cancelled.
B. Existing equity interests in Resorts will be cancelled.
C. RII/RIFI Debentureholders and GRI Noteholders will be issued a combination of the following:
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