Exhibit 10.1

 

Settlement Agreement, dated March 23, 2005

 

SETTLEMENT AGREEMENT

 

This Agreement is between the Indiana Department of Revenue (“IDR”) and Trump
Indiana, Inc. (“Trump Indiana”), and is entered into as of March 23, 2005.

 

Recitals

 

WHEREAS, Trump Indiana commenced its case under Chapter 11, Title 11, United
States Code (the “Bankruptcy Code”) on November 21, 2004 (the “Petition Date”);
and

 

WHEREAS, on November 22, 2004, the United States Bankruptcy Court for the
District of New Jersey (the “Bankruptcy Court”) granted Trump Indiana’s Motion
For Order Authorizing Debtors To Pay Prepetition Trust Fund Taxes, Other
Prepetition Priority Taxes And Gaming Taxes And Fees, and Trump Indiana’s Motion
For Order Authorizing Payment Of Certain Prepetition Customer Related Claims And
Obligations (collectively, the “First Day Orders”); and

 

WHEREAS, IDR filed its Proof of Claim (the “IDR Claim”) asserting its claim for
taxes, a copy of which is attached hereto as Exhibit A; and

 

WHEREAS, Trump Indiana disputes certain tax obligations set forth in the IDR
Claim; and

 

WHEREAS, it is the duty of the Commissioner of IDR to enforce and uphold the tax
laws of the State of Indiana; and

 

WHEREAS, IDR has reviewed the facts and law applicable to the liabilities of
Trump Indiana; and

 

WHEREAS, IDR and Trump Indiana desire to enter into a written agreement that
eliminates the necessity of litigating their differences on the same substantive
issues for different tax years, as well as end the liability of Trump Indiana
for corporate income taxes and sales and use taxes, interest, and penalties
arising from IDR’s audit of Trump Indiana’s business activities during certain
tax periods and to obtain payment in full of such obligations promptly; and

 

WHEREAS, Trump Indiana and IDR seek to resolve the disputes between them and to
fix the amount and treatment of all claims asserted by IDR and to provide for
the payment of such claims pursuant to Section 3.03(b) of Trump Indiana’s
Amended Joint Plan of Reorganization, dated February 12, 2005, as amended from
time to time (the “Plan”), which provides for payment of tax claims pursuant to
an agreement by the parties; and

 

WHEREAS, pursuant to the terms of this Agreement and consistent with the
proposed Plan, Trump Indiana will pay IDR $20,708,071.28 as set forth below in
satisfaction of IDR’s tax claims against Trump Indiana for all unpaid tax
obligations existing as of the Petition Date in final resolution of all tax
claims related to tax returns filed through that date except as set forth
herein; and

 

WHEREAS, based upon this Agreement, IDR has refrained from asserting an
objection to confirmation of the Plan.

 

NOW THEREFORE, in consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties hereby agree as follows:

 

1. Recitals. The recitals set forth herein above are a material part of this
Agreement and are hereby incorporated by reference.

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2. This is an agreement referenced in Sections 3.03(b) and 5.23 of the Plan and
shall be effective upon entry of the Confirmation Order; provided, however, (a)
the requirement for Interim Payments (as defined below) set forth under ¶ 3(a)
hereof shall immediately be effective upon execution hereof; and (b) at the sole
election of IDR, this Agreement shall terminate and all compromises as to the
claims resolved herein shall become void if the Effective Date (as defined in
the Plan) does not occur on or before June 30, 2005, and/or the payments due
under ¶ 3(a) are not made within ten (10) days of the date they are due.

 

3. Payment Schedule. Trump Indiana shall pay IDR $20,708,071.28, payable as
follows:

 

(a) Within five (5) days of execution of this Agreement, and pursuant to the
First Day Orders, Trump Indiana shall pay IDR $500,000 at the notice address set
forth below and shall pay each month thereafter on the first day of such month
$500,000, through and including the Effective Date (collectively, the “Interim
Payments”). These Interim Payments shall be applied first to the satisfaction of
liabilities for all taxes entitled to the lowest priority pursuant to Bankruptcy
Code § 507, i.e., the general unsecured tax claims and, upon satisfaction
thereof, to the next lowest priority claim and so forth, until paid in full.

 

(b) On the Effective Date, Trump Indiana shall pay the balance of the settlement
amount to IDR.

 

This Agreement and the payments described in this Section 3 are subject to
approval of the Bankruptcy Court. Within five business days of the date on which
this Agreement is executed, Trump Indiana shall file a motion seeking such
approval and shall use commercially reasonable efforts to obtain such approval.
In the event the Bankruptcy Court does not provide such approval, IDR shall
disgorge any payments received on or before the date on which the Bankruptcy
Court denies such approval. In that event, moreover, the releases set forth at
Section 5 below shall not be effective and IDR shall retain whatever rights it
has or had, prior to and as of the date of this Agreement, to assert any and all
claims against Trump Indiana. Notwithstanding the foregoing, Trump Indiana shall
make all payments described in this Section 3 in accordance with terms hereof
pending the approval of the Bankruptcy Court.

 

4. Written Satisfaction. Within five (5) days of Trump Indiana making its final
payment in accordance with this Agreement, IDR shall issue to Trump Indiana a
letter indicating that the IDR Claim is fully and completely satisfied.

 

5. Releases. Upon receipt and application of the payment hereunder pursuant to ¶
3(b): (a) IDR agrees and confirms that it will not hereafter seek to assess or
reassess against or collect from Trump Indiana, or any officer, director,
shareholder, employee or agent of Trump Indiana, any Income Tax or Sales/Use
Tax, including related interest or penalties, for the tax periods of the IDR
Claim and that such tax periods are closed to assessments; provided, however,
that if Trump Indiana files a Claim for Refund (which it may do respecting
solely the amounts of base tax, interest, and penalty for 2003 that are
identified as “per audit” on the exhibit to the IDR Proof of Claim), then IDR is
free to audit and assess all claims related in any way to that Claim for Refund
and all normal and customary administrative procedures related thereto shall
apply and be followed; (b) IDR hereby releases Trump Indiana and all officers,
directors, shareholders, employees or agents of Trump Indiana from liability for
any Income Tax or Sales/Use Tax, including related interest and penalties for
the tax periods of the IDR Claim, except for the promises contained in this
Agreement, including any Claim for Refund audit set forth above. Upon the grant
of the release set forth above, Trump Indiana hereby releases the State of
Indiana, IDR, employees, officers, agents and attorneys, from any and all
liabilities, expenses, demands, causes of action and claims whatsoever related
to the IDR Claim and resolved hereby, except for the promises contained in this
Agreement, including any Claim for Refund, if any, specifically set forth above.

 

6. Waiver. Trump Indiana agrees and confirms that it will not seek through claim
for refund or any other method a refund of any Income Tax or Sales/Use Tax for
the tax periods of the IDR Claim, except for the specific Claim for Refund
permitted above. Trump Indiana acknowledges hereby that it waives any and all
objections to the IDR Claim, as modified hereby and further acknowledges that
relief under § 505 of the Bankruptcy Code is inapplicable and inappropriate
hereunder. Trump Indiana hereby further waives its rights to relief under
Bankruptcy Code § 505 respecting the IDR Claim and taxes assessed therein or
claims for refund asserted by Trump Indiana covered by this Agreement.

 

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7. Confidentiality. Trump Indiana and IDR, for themselves and for their
respective attorneys in this action agree: (a) they will not divulge, disclose,
or communicate to any other person, organization, or corporation that is not
affiliated with or related to Trump Indiana, the terms or conditions of this
Agreement except as may be required by law; and (b) they will not disclose,
disseminate, or reveal the original, any copy, or any portion of this Agreement
to any person, organization, or corporation that is not affiliated with or
related to Trump Indiana, except as may be required by law; provided, however,
nothing herein shall prohibit either the parties or their attorneys from
divulging, disclosing, or communicating about this Agreement and its terms and
conditions, either orally or in writing, or from disclosing, disseminating, or
revealing this Agreement:

 

(i) to IDR, its employees, agents, and attorneys, or a court, or

 

(ii) to Trump Indiana or its employees, agents, and attorneys, in connection
with this or any other Indiana tax dispute involving Trump Indiana.

 

8. Authority. Each party to this Agreement hereby represents and warrants that
it has legal authority to enter this Agreement with respect to the subject
matter of this Agreement, that the person executing the Agreement on behalf of
the party is authorized to do so, and that the Agreement shall be binding and
enforceable when duly executed and delivered by each party. This Agreement shall
be binding upon and inure to the benefit of each of the parties and their
respective or related departments, agencies, predecessors, successors and
assigns.

 

9. No Admission Of Liability. Neither party to this Agreement, by the execution
of this Agreement or the performance of its terms, shall be deemed to have made
any admission or concession of fact or law whatsoever.

 

10. Scope Of Agreement. This Agreement represents a compromise of all issues
between the parties.

 

11. Miscellaneous. Time is of the essence of this Agreement. The parties,
jointly and severally, covenant and agree to execute and deliver, or cause to be
executed and delivered, upon request by IDR, such further instruments and
documents, and to perform or cause to be performed, such further acts, as may be
necessary to carry out the terms, provisions, and purposes of this Agreement.
Any modification, amendment, or waiver of any provision of this Agreement, or a
consent to any departure by the parties, jointly and severally, shall be
effective only when the same shall be in writing and signed by both parties, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose given.

 

12. Choice Of Law. This Agreement shall be governed by Indiana law and shall be
modified only in writing signed by the parties.

 

13. Notices. Any notices, demands, or communications required or permitted under
this Agreement (including all payments) shall be in writing and shall be
directed as follows:

 

If to IDR:    Dr. Jerome M. Secttor, Deputy Administrator      Legal Division  
   Indiana Department of Revenue      Room N248      100 North Senate Avenue  
   Indianapolis, IN 46204 With a copy to:    Michael W. Hile, Esq.      Katz &
Korin, P.C.      334 North Senate Avenue      Indianapolis, IN 46204-1708
If to Trump Indiana:    Trump Indiana, Inc.      One Buffington Harbor     
Gary, IN 46401      Attn: Chris Leininger

 

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With a copy to:            Jeff Dible, Esq.      Locke Reynolds, LLP      201 N.
Illinois Street, Suite 1000      P.O. Box 44961      Indianapolis, IN 46244-0961

 

14. Binding Effect. This Agreement shall be binding upon and shall enure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors and assigns.

 

15. Captions. The captions to this Agreement are inserted for convenience of
reference only and in no way define, describe or limit the scope or intent of
this Agreement or any of the provisions hereof.

 

16. Counterparts. This Agreement may be executed in the original or in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.

 

Trump Indiana, Inc.    Indiana Department of Revenue

By:

  

/s/    CHRIS LEININGER        

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By:

  

/s/    JOHN ECKART        

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Printed:    Chris Leininger    Printed:    John Eckart Title:    General Manager
   Title:    Commissioner

By:

  

/s/    JEFF DIBLE        

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By:

  

/s/    MICHAEL J. GABOVITCH        

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     Jeff Dible, Esq.         Michael J. Gabovitch, Esq. Attorney for Trump,
Indiana, Inc.    Attorney for the Indiana Department of Revenue

 

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