GB Holdings unsecured creditors committee files plan of liquidation, intends to sell Atlantic Coast stock

By Caroline Salls

Pittsburgh, April 5 - GB Holdings, Inc.'s official committee of unsecured creditors filed a plan of liquidation and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of New Jersey.

Under the plan, GB Holdings will be dissolved.

Substantially all of the company's assets will be transferred to a liquidating trust to maximize the value of and liquidate the company's assets and prosecute causes of action against the company.

The trust will enter into an up to $5 million exit facility to fund plan distributions and the costs of maintaining the trust and assets.

The company's principal tangible asset is 2.88 million shares of Atlantic Coast Entertainment Holdings, Inc. Allied has no operating activities and no income.

The exit facility will be funded by the company's noteholders and secured by Atlantic Holdings stock.

All noteholders will be eligible to participate as lenders, subject to a minimum contribution of $100,000 each.

If there is a shortfall in participation by the noteholders, other holders can increase the amount of their participation in proportion to the holders who do participate, provided, however, that if no holders other than the members of the committee choose to participate, the members of the committee have agreed to provide the full principal amount of the exit facility.

The exit facility will be repaid from proceeds of the liquidating trust assets before any distributions to holders of liquidating trust interests are made, but after all costs of the trust are paid in full.

Proceeds from the liquidating trust will be distributed to holders of $46.15 million in general unsecured claims, and holders of equity interests, excluding interests held by the Icahn entities, will receive the residual interest from the trust after all general unsecured claims and liquidating trust costs are paid in full with interest.

In connection with the "self-interested and conflicted actions of Carl C. Icahn and the Icahn entities," all claims held by affiliates of Icahn or the Icahn entities will be deemed disputed under the plan and objected to by the trust board.

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

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