GB Holdings shareholder objects to stock sale after requesting examiner

By Caroline Salls

Pittsburgh, Nov. 2 - GB Holdings, Inc.'s proposed sale of its stock in Atlantic Coast Entertainment Holdings, Inc. drew objection from shareholder Robino Stortini Holdings, LLC in light of its request for appointment of an examiner in GB's Chapter 11 case, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of New Jersey.

According to Robino Stortini, it would be prejudicial to GB's creditors and equity interest security holders to proceed with the sale without first determining whether an examiner must be appointed and whether additional assets can be recovered and returned to the estate via fraudulent transfer claims.

On Tuesday, Robino Stortini requested appointment of an examiner or an order directing GB's U.S. Trustee to appoint an official committee of equity interest holders amid controversy surrounding an exchange offer for GB's 11% notes.

According to the motion, a shareholders' vote to approve an exchange offer for the company's 11% notes due Sept. 29 for shares in Atlantic Coast Entertainment Holdings, Inc. was "a mere formality" because GB's chairman of the board of directors Carl Icahn controlled 77% of GB's outstanding equity and 58% of the notes.

In previous court documents, GB said some holders of the 11% notes have alleged the various recent corporate transactions may constitute a fraudulent transfer.

Saying there were no objections at the time they were carried out, GB said "it appears that this recent assertion by the 11% noteholders is merely a negotiating strategy."

A hearing on the stock sale is scheduled for Nov. 11. A hearing on appointment of an examiner is scheduled for Nov. 28.

GB Holdings has no operating activities. It filed for bankruptcy on Sept. 29. Its Chapter 11 case number is 05-42736.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.