Tropicana Trademark Lawsuit

BAY:01608040v1

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re: TROPICANA ENTERTAINMENT, LLC, et al.,

Debtors.

Chapter 11 Case No. 08-10856 (KJC) Jointly Administered

ICAHN AGENCY SERVICES LLC, ICAHN PARTNERS LP, ICAHN PARTNERS MASTER FUND LP, ICAHN PARTNERS MASTER FUND II LP, ICAHN PARTNERS MASTER FUND III LP, TROPICANA ENTERTAINMENT INC., AND NEW TROPICANA HOLDINGS, INC.,

Plaintiffs,

v. TROPICANA LAS VEGAS, INC. and HOTEL RAMADA OF NEVADA, LLC.

Defendants.

Adv. Proc. No. 10-_____ (KJC)

COMPLAINT

Plaintiffs Icahn Agency Services LLC, as administrative and collateral agent (the

“Exit Facility Agent”) for the lenders under the December 29, 2009 OpCo Exit Facility

(the “OpCo Exit Facility Lenders”), Icahn Partners LP, Icahn Partners Master Fund LP,

Icahn Partners Master Fund II LP, Icahn Partners Master Fund III LP, Tropicana

Entertainment Inc. (“New Tropicana”), and New Tropicana Holdings, Inc. (“New

Tropicana Holdings”) (collectively, the “Plaintiffs”) by and through their undersigned

counsel, bring this action against defendants Tropicana Las Vegas, Inc. and Hotel

Ramada of Nevada, LLC. In support thereof, Plaintiffs hereby allege, upon knowledge as

BAY:01608040v1

2

to themselves and their conduct, and upon information and belief as to all other matters,

as follows:

NATURE OF THE ACTION

1. Plaintiffs commence this adversary proceeding to enforce prior orders1 of

this Court and to enjoin the Defendants’ wrongful efforts to assert in a Nevada state court

action that they, and not New Tropicana Holdings, are the owners of the “TROPICANA”

and “TROP” trademarks and service marks (the “Tropicana Trademarks”).

2. For more than 30 years, the OpCo and LandCo Debtors (defined below)

represented to the world that the Tropicana Trademarks were owned by an OpCo Debtor.

Among other things, billions of dollars of acquisitions, sales and loans were made based

upon those representations. The lenders and creditors who became the owners of the

reorganized OpCo and LandCo Debtors were told and understood an OpCo Debtor to be

the owner of the Tropicana Trademarks when they loaned money pre-petition to OpCo

and LandCo. After the filing, DIP loans and use of cash collateral premised upon an

OpCo Debtor’s ownership of the Tropicana Trademarks were approved by this Court

after giving all interested parties an opportunity to object. And most recently, the values

ascribed to the OpCo and LandCo estates and plans of reorganization were premised

upon ownership of the Tropicana Trademarks resting with OpCo, and this Court entered

1 The relevant orders include those (a) authorizing the use of cash collateral and the establishment of DIP financing, (b) confirming the Debtors’ plans of reorganization, (c) granting the Exit Facility Agent a valid and perfected security interest in the Tropicana Trademarks for the benefit of the OpCo Exit Facility Lenders, free and clear of all other liens, claims and encumbrances, and (d) annulling the automatic stay to permit the Defendants to proceed with the state court action in Nevada solely concerning the dispute over the right to use the Tropicana Trademarks without a license fee.

BAY:01608040v1

3

orders approving the plans of reorganization and granting the OpCo Exit Facility Lenders

liens on the Tropicana Trademarks free and clear of all liens, claims and encumbrances.

3. There was only one issue open for litigation in Nevada under the plans of

reorganization: Defendants’ alleged right to use the Tropicana Trademark on a royalty

free basis in connection with their Las Vegas operations as they had when the LandCo

Debtors were wholly owned by the OpCo Debtors. But contrary to prior assurances to

this Court by their counsel – stating that they would not seek “any property” in the

Nevada state court action entitled Tropicana Las Vegas, Inc., et al. v. Aztar Corporation,

et al., Case No. A09595469-B (Nev. D. Ct., Clark County) (the “Nevada Action”) –

Defendants are now seeking a declaration in the Nevada Action that they actually own the

Tropicana Trademarks based upon a document that they describe as a “newly discovered”

agreement from thirty years ago (the “1980 Trade Name Agreement”).

4. Defendants’ claim that the document is “newly discovered” (even if true)

offers no justification to revisit the Court’s prior orders. The LandCo entities had as

much access to the 1980 Trade Name Agreement as the OpCo entities during the

bankruptcy proceedings.

5. At this juncture, the existence of the 1980 Trade Name Agreement is

meaningless. The agreement has long since been extinguished, if not by 2002 when

Aztar Corporation became the beneficial owner of all the equity in the entity alleged to

have contingent reversionary interest, then by operation of law subsequently by, inter

alia, the failure to record the agreement with the United States Patent & Trademark

Office prior to the transfer of title to the Tropicana Trademarks to Tropicana

Entertainment, LLC in 2007. But according to Defendants, the (long-extinguished) 1980

BAY:01608040v1

4

Trade Name Agreement is a basis upon which to change everything. Based on upon that

document, Defendants are now seeking a sub rosa plan modification in the Nevada

Action – one that would result in a massive windfall for Defendants and their owners to

the extreme detriment of Plaintiffs with cash collateral, financing and security interests at

stake.

6. As this Court is aware, the Debtors in this complex bankruptcy fell into

two groups: (1) the “LandCo Debtors,” which included the entities previously involved in

the ownership and operation of the Tropicana Hotel and Casino in Las Vegas, Nevada

(the “Tropicana Las Vegas”);2 and (2) the “OpCo Debtors,” which included the entities

previously involved in the operation of the Tropicana Casino & Resort Atlantic City in

New Jersey (the “Tropicana A.C.”), the Tropicana Express in Laughlin, Nevada, and

other casinos.3 As described below, the Defendants now threaten to undermine a series

of key orders of this Court that ultimately vested the ownership of the Tropicana

2 The LandCo Debtors were financed by the “LandCo Credit Facility,” which was secured by the assets relating to the business of Tropicana Las Vegas. The LandCo Debtors included: Adamar of Nevada Inc.; Hotel Ramada of Nevada, Corp.; Tropicana Development Company, LLC; Tropicana Enterprises; Tropicana Las Vegas Holdings, LLC; Tropicana Las Vegas Resort and Casino, LLC; and Tropicana Real Estate Company, LLC.

3 The OpCo Debtors were financed by the “OpCo Credit Facility,” which was secured by all of the Debtors’ assets that were not encumbered by the LandCo Credit Facility. The OpCo Debtors included: Aztar Corporation; Tropicana Entertainment, LLC; Adamar Garage Corporation; Argosy of Louisiana, Inc.; Atlantic-Deauville Inc.; Aztar Development Corporation; Aztar Indiana Gaming Company, LLC; Aztar Indiana Gaming Corporation; Aztar Missouri Gaming Corporation; Aztar Riverboat Holding Company, LLC; Catfish Queen Partnership in Commendam; Centroplex Centre Convention Hotel, L.L.C.; Columbia Properties Laughlin, LLC; Columbia Properties Tahoe, LLC; Columbia Properties Vicksburg, LLC; CP Baton Rouge Casino, L.L.C.; CP Laughlin Realty, LLC; Jazz Enterprises, Inc.; JMBS Casino LLC; Manchester Mall, Inc.; Ramada New Jersey Holdings Corporation; Ramada New Jersey, Inc.; St. Louis Riverboat Entertainment Inc.; Tahoe Horizon, LLC; Tropicana Entertainment Holdings, LLC; Tropicana Entertainment Intermediate Holdings, LLC; Tropicana Express, Inc.; and Tropicana Finance Corp.

BAY:01608040v1

5

Trademarks in a subsidiary of New Tropicana4 and granted a valid security interest in the

Tropicana Trademarks to the Exit Facility Agent.

7. This Court’s May 30, 2008, Cash Collateral Order (Docket No. 219) (the

“Cash Collateral Order”) confirmed that: (1) Tropicana Entertainment, LLC, an OpCo

Debtor and the former parent company of the other Debtors, was the owner of the

Tropicana Trademarks, and (2) the OpCo Credit Facility lenders (the “OpCo Lenders”)

had a valid and perfected security interest in all of the assets of the OpCo Debtors,

including the Tropicana Trademarks. All parties in interest, such as the lenders under the

LandCo Credit Facility (the “LandCo Lenders”), could have challenged these findings

during the 90-day challenge period. None of them did so because all of them knew that

Tropicana Entertainment, LLC owned the Tropicana Trademarks and all of them had

acted in reliance on that knowledge (in some cases for years). Following the Cash

Collateral Order, the DIP lenders loaned millions of dollars in reliance on the Court’s

finding that Tropicana Entertainment, LLC could validly pledge (and therefore owned),

the Tropicana Trademarks as collateral to the DIP lenders. The Cash Collateral Order

also confirmed that the LandCo Lenders had no security interest in the Tropicana

Trademarks. Indeed, Onex Corporation and its affiliated companies (collectively,

“Onex”) – now the controlling stockholders of Defendant Tropicana Las Vegas, Inc. –

acquired a majority interest in the LandCo Credit Facility after the Cash Collateral Order

made it crystal clear that the LandCo Lenders had no claim to ownership of the Tropicana

4 That subsidiary, Tahoe Horizon, LLC, subsequently transferred the Tropicana Trademarks to New Tropicana Holdings.

BAY:01608040v1

6

Trademarks. Indeed, Onex had absolutely no expectation that the Reorganized LandCo

Debtors5 would own the Tropicana Trademarks.

8. This Court’s May 5, 2009, Plan Confirmation Order (the “Confirmation

Order”) (Docket No. 2001) confirmed the reorganization plan of the OpCo Debtors (the

“OpCo Plan”) (as amended, Docket No. 2545), which included the Tropicana

Trademarks as an asset of Tropicana Entertainment, LLC (an OpCo Debtor). That same

day, the Court confirmed the reorganization plan of the LandCo Debtors (the “LandCo

Plan”) (Docket No. 2002), which claimed no ownership interest in the Tropicana

Trademarks. In confirming the OpCo and LandCo Plans, the Court approved post-

petition liens on the Tropicana Trademarks (in favor of the Exit Facility Agent on behalf

of the OpCo Exit Facility Lenders), valuations of the OpCo Debtors’ estate (which

included the Tropicana Trademarks), valuations of the LandCo Debtors’ estate (which

did not include the Tropicana Trademarks), and distributions to creditors based on those

valuations. The Confirmation Order also provided that, upon the effective date of the

OpCo Plan, the Tropicana Trademarks were to be assigned to a reorganized OpCo Debtor

and pledged as collateral to the OpCo Exit Facility Lenders.6 Thereafter, literally

hundreds of corporate transactions implementing or relating to the OpCo Plan took place

in reliance on the validity of the liens and underlying ownership interests established by

the Confirmation Order. For example, the OpCo Exit Facility Lenders loaned $150

5 The Reorganized LandCo Debtors include: Tropicana Las Vegas Hotel and Casino, Inc., Tropicana Las Vegas Intermediate Holdings Inc., Tropicana Las Vegas, Inc., and Hotel Ramada of Nevada, LLC.

6 The Tropicana Trademarks were subsequently assigned, subject to the pledge, to New Tropicana Holdings.

BAY:01608040v1

7

million to the Reorganized OpCo Debtors in reliance on the inclusion of the Tropicana

Trademarks in the collateral securing the OpCo Exit Facility.

9. The Defendants (or their owners, the LandCo Lenders), or any other party

in interest, could have challenged the liens and the corresponding ownership interests

confirmed in the Cash Collateral Order and the Confirmation Order before the end of the

applicable challenge period in this Court, and certainly before the OpCo Plan effective

date. The LandCo Lenders and the Defendants opted to do neither – had they done so,

and had this Court ruled in their favor, significant value would have been shifted from the

OpCo Debtors to the LandCo Debtors, and the plans of reorganization in these cases

would have been much different. Instead, acting at the direction of the former LandCo

Lenders, the Defendants have now chosen to attack collaterally this Court’s prior orders

in a different forum, in the Nevada Action.

10. In seeking relief from the automatic stay in connection with the Nevada

Action, Defendants told this Court in their motion papers and at the hearing on the

motion that they were not seeking “any property” from New Tropicana’s predecessors in

the Nevada Action and that they were not seeking to limit the Reorganized OpCo

Debtors’ continued use of the Tropicana Trademarks or the expansion of that use

anywhere in the world other than Las Vegas. Defendants made this representation

knowing that litigating ownership issues in the Nevada Action would completely

undermine the foundation of the Debtors’ reorganizations, including: (a) the core

valuations and distributions in the OpCo and LandCo Plans; (b) the confirmed ownership

interest in the Tropicana Trademarks held by New Tropicana Holdings; and (c) the valid

and perfected security liens on the Tropicana Trademarks relied upon by the OpCo Exit

BAY:01608040v1

8

Facility Lenders in loaning $150 million in exit financing to the Reorganized OpCo

Debtors.7 This Court granted relief from the automatic stay in reliance on Defendants’

assurances, explaining that “there is no dispute that one of the OpCo entities is the record

owner of the intellectual property in dispute as a matter of record.” (Tr., pp 52-53.) The

Defendants, however, did not keep acting in accordance with their own representation.

11. Although the Defendants’ original complaint in the Nevada Action merely

sought a right to use the Tropicana Trademarks without any control by or payment to the

OpCo Debtors, Defendants have since radically changed their goals in that case.

Specifically, in a recent summary judgment motion, Defendants requested a declaration

that they actually owned the Tropicana Trademarks. This is not a small change – the

Tropicana Trademarks had an appraised value of almost $200 million in 2007 – and is a

blatant end run around this Court’s valid and binding orders in the bankruptcy, upon

which everyone has relied. Indeed, if the Defendants actually owned the Tropicana

Trademarks – which they do not – then this would create an immediate event of default

under the OpCo Exit Facility to the detriment of the Reorganized OpCo Debtors.

12. Incredibly, Defendants did not alert the Nevada state court that the issue of

ownership had already been determined by prior orders of this Court. In fact,

Defendants actually represented to the Nevada state court during oral argument on the

7 The Reorganized OpCo Debtors include: Aztar Indiana Gaming Company, LLC, Aztar Riverboat Holding Company, LLC, Catfish Queen Partnership in Commendam, Centroplex Centre Convention Hotel, L.L.C., Columbia Properties Laughlin, LLC, Columbia Properties Tahoe, LLC, Columbia Properties Vicksburg, LLC, CP Laughlin Realty, LLC, CP St. Louis Acquisition, LLC, CP St. Louis Casino, LLC, Greenville Riverboat, LLC, JMBS Casino, LLC, New Jazz Enterprises, L.L.C., New St. Louis Riverboat, LLC, New Tropicana Holdings, Inc., New Tropicana OpCo Inc., Tahoe Horizon, LLC, Tropicana Atlantic City Corp., Tropicana AC Sub Corp., Tropicana Entertainment Inc. and Tropicana Express, LLC.

BAY:01608040v1

9

summary judgment motion on May 12, 2010 that the question of ownership of the

Tropicana Trademarks had been “punted” to the Nevada Court to adjudicate, with the

“express permission of the United States Bankruptcy Court, having jurisdiction over both

sides of the bankruptcy.” (Tr. of Nevada Court Hearing on Summary Judgment Apr. 15,

2010, p. 9:9-14) That is simply not true, and was intentionally misleading.

13. Despite the Defendants’ misrepresentations to the Nevada Court, their

summary judgment motion in the Nevada Action was denied.8 At the oral argument on

the motion, and in the findings of fact, the Nevada Court indicated that direction was

needed from this Court concerning the issue of ownership. In particular, as a predicate to

Defendants’ claim in the Nevada Action, the LandCo Debtors submitted supplemental

bankruptcy schedules (months after the effective date of the LandCo Plan) to include the

1980 Trade Name Agreement that purportedly gave rise to Defendants’ new claim for

ownership of the Tropicana Trademarks. Reluctant to decide whether the belated

amended bankruptcy schedules are valid (they are not), the Nevada Court stated that it

“assume[d] that somebody will ask the Bankruptcy Court judge to do something.” (Tr. of

Nevada Court Hearing on Summary Judgment Apr. 15, 2010 at 101.) The Nevada state

court also sought further guidance on the treatment of the 1980 Trade Name Agreement,

stating that “[w]hether the Bankruptcy Court has ruled on the status of the reversionary

interest [in that agreement] is unclear.” (Findings of Fact and Conclusions of Law Jun. 9,

2010, ¶ 77.)

8 The court also denied the cross-motion for summary judgment by the defendants.

BAY:01608040v1

10

14. To provide the requested guidance to the Nevada Court, this Court need

only look to the Cash Collateral Order and the Confirmation Order. These orders are

dispositive.

15. The Cash Collateral Order and Confirmation Order also are consistent

with decades of corporate history and public filings. A list (by no means exhaustive) of

the overwhelming historical evidence establishing the ownership of the Tropicana

Trademarks includes:

• Thirty years of public federal trademark registrations indicated to the world that various OpCo Debtors (typically the parent company before the bankruptcy) owned the Tropicana Trademarks through an unbroken recorded chain of title.

• In 1989, the LandCo Debtors that were signatories to the 1980 Trade Name Agreement signed an assignment that confirmed that their parent company, Aztar Corporation (“Aztar,” an OpCo Debtor), owned the Tropicana Trademarks.

• In 2002, Aztar expressly extinguished any contingent reversionary interest that may have existed under the 1980 Trade Name Agreement following a transaction in 2002, in which it became the beneficial owner of 100% of the equity in the business entity that held that alleged interest.

• In 2002, Aztar’s extinguishment of any reversionary interest was expressly memorialized in public filings with the SEC, which stated that Aztar “acquired unrestricted rights to the [Tropicana] name.” Aztar, Form 10-K (Mar. 7, 2002) (Ex. A.) Aztar’s subsequent Form 10-K filings were consistent, reciting Aztar’s sole and unrestricted ownership of the Tropicana Trademarks.

• In 2004, Aztar’s ownership of the Tropicana Trademarks was reconfirmed, when it pledged the Tropicana Trademarks as collateral to Bank of America as part of a $ 675 million credit facility – with the knowledge and consent of various predecessors of Defendant Tropicana Las Vegas, Inc.

• In 2007, when Wimar Tahoe (later renamed Tropicana Entertainment, LLC) acquired all of the outstanding stock of Aztar for over $2.1 billion, Aztar represented that it (not a LandCo company) owned the Tropicana Trademarks and subsequently transferred record title to Tropicana Entertainment, LLC (an OpCo Debtor), thereby extinguishing any and all unrecorded interests, including those LandCo now claims to possess.

BAY:01608040v1

11

• In 2007, the OpCo Debtors and the LandCo Debtors were required to identify and pledge any and all U.S. trademark registrations that they owned as collateral for the OpCo Credit Facility and the LandCo Credit Facility. Consistent with decades of public representations, the OpCo Debtors’ schedules in connection with that loan identified Aztar as the owner of the Tropicana Trademarks. The LandCo Debtors did not identify any ownership interest in the Tropicana Trademarks in connection with the LandCo Credit Facility issued at the same time.

• In July 2008, the LandCo and OpCo Debtors each prepared pre-confirmation schedules that listed their respective assets and liabilities. Tropicana Entertainment, LLC, listed the Tropicana Trademarks as assets. No LandCo Debtor included the Tropicana Trademarks in its list of assets.

16. As a result of Defendants’ wrongful collateral attack on this Court’s prior

orders, and the Nevada state court’s need for clarity on the impact of those orders,

Plaintiffs are compelled to file this action to enforce this Court’s prior orders and to seek

a declaratory judgment that: (1) New Tropicana Holdings, Inc. is the sole owner of the

Tropicana Trademarks (as the Tropicana Trademarks were property of Tropicana

Entertainment, LLC’s estate and collateral for the OpCo Lenders); (2) Icahn Agency

Services LLC has a valid and perfected security interest in the Tropicana Trademarks for

the benefit of the OpCo Exit Facility Lenders (regardless of who owns the Tropicana

Trademarks); (3) the LandCo Debtors’ supplemental bankruptcy schedules are null and

void; and (4) the Defendants in the Nevada Action violated the automatic stay to the

extent they sought to acquire ownership of the Tropicana Trademarks, as opposed to

merely the right to use those marks in connection with their Las Vegas operations.

Plaintiffs also seek a permanent injunction prohibiting Defendants or their affiliates from

litigating any alleged ownership interests in the Tropicana Trademarks in the Nevada

Action, or in any other proceeding in any jurisdiction.

BAY:01608040v1

12

JURISDICTION AND VENUE

17. This Court has subject matter jurisdiction over this action pursuant to 28

U.S.C. § 1334(b) and 28 U.S.C. § 157 and the Standing Order referring cases under the

Bankruptcy Code to the United States Bankruptcy Court for the District of Delaware

dated July 23, 1984. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B)

and (O) because this action involves the jurisdiction of the bankruptcy court to enforce

the finality of its prior Orders and prevent belated collateral attacks on those Orders to the

detriment of debtors, creditors, and exit lenders.

18. Venue lies in this District pursuant to 28 U.S.C. § 1409(a) because this

action arises under the Bankruptcy Code, involves property of the OpCo Debtors’ estates,

and arises in and is related to the OpCo Debtors’ Chapter 11 cases.

THE PARTIES

19. Plaintiff New Tropicana is a Delaware corporation with a principal place

of business in Clark County, Nevada, is the ultimate parent of the Reorganized OpCo

Debtors, and is the Borrower under the OpCo Exit Facility. It is the successor to

Tropicana Entertainment, Holdings LLC, which was the parent company of the LandCo

Debtors prior to the 2008 Bankruptcy. Tropicana Entertainment, LLC is named as a

defendant in the Nevada Action.

20. Plaintiff New Tropicana Holdings is a Delaware corporation with a

principal place of business in Clark County, Nevada. New Tropicana Holdings is a

wholly owned subsidiary of New Tropicana, a guarantor under the OpCo Exit Facility

and the owner of the Tropicana Trademarks.

21. Plaintiff Icahn Agency Services LLC is a Delaware limited liability

company with a principal place of business in New York. Icahn Agency Services LLC is

BAY:01608040v1

13

the sole agent entitled to enforce the rights of the OpCo Exit Facility Lenders under the

December 29, 2009 Exit Facility.

22. Plaintiff Icahn Partners LP is a Delaware limited partnership with a

principal place of business in New York. Plaintiff Icahn Partners LP was a lender under

the prepetition OpCo Credit Facility.

23. Plaintiff Icahn Partners Master Fund LP is a limited partnership organized

under the laws of the Cayman Islands with a principal place of business in the Cayman

Islands. Plaintiff Icahn Partners Master Fund LP was a lender under the prepetition

OpCo Credit Facility.

24. Plaintiff Icahn Partners Master Fund II LP is a limited partnership

organized under the laws of the Cayman Islands with a principal place of business in the

Cayman Islands. Plaintiff Icahn Partners Master Fund II LP was a lender under the

prepetition OpCo Credit Facility.

25. Plaintiff Icahn Partners Master Fund III LP is a limited partnership

organized under the laws of the Cayman Islands with a principal place of business in the

Cayman Islands. Plaintiff Icahn Partners Master Fund III LP was a lender under the

prepetition OpCo Credit Facility.

26. Defendant Hotel Ramada of Nevada, LLC is a Nevada limited liability

company with a principal place of business in Clark County, Nevada. Hotel Ramada of

Nevada, LLC is the successor to Hotel Ramada of Nevada, Corp. (“Hotel Ramada of

Nevada”), a plaintiff in the Nevada Action.

27. Defendant Tropicana Las Vegas, Inc. is a Nevada corporation with a

principal place of business in Clark County, Nevada. Tropicana Las Vegas, Inc. was

BAY:01608040v1

14

formed in 2009, and is controlled by Onex – which, after the filing of these Chapter 11

cases, became the largest secured lender under the LandCo Credit Facility. Tropicana

Las Vegas, Inc. is a plaintiff in the Nevada Action.

FACTUAL BACKGROUND

28. Consistent with the Court’s Cash Collateral Order and Confirmation

Order, New Tropicana Holdings’ sole and exclusive ownership of the Tropicana

Trademarks can be traced through a chain of agreements, public registrations, and public

disclosures reflecting Defendants’ and their predecessors’ agreement and participation in

recognition of ownership.

The Tropicana Las Vegas

29. The Tropicana Las Vegas opened its doors for business in 1957. Hotel

Conquistador, Inc. (“Conquistador”) originally operated the Tropicana Las Vegas on land

owned by the Jaffe family (the “Jaffe Group”). Although the Jaffe Group did not claim

any ownership rights in the “Tropicana” name in the 1972 lease between Conquistador

(as lessee) and the Jaffe Group (as lessor), the lease required Conquistador to transfer to

the Jaffe Group whatever right it had, if any, in the “Tropicana” name after the

termination of the lease. In 1977, the Jaffe Group and Edward and Fred Doumani (the

“Doumanis”) formed a partnership called Tropicana Enterprises which succeeded the

Jaffe Group as the lessor to Conquistador. The relevant corporate relation can be

illustrated as follows:

BAY:01608040v1

15

30. On June 26, 1979, Hotel Ramada of Nevada acquired from Conquistador

the lease of the Tropicana Las Vegas and the right to use the “Tropicana” name. Hotel

Ramada of Nevada was a subsidiary of Ramada Inns, Inc., a predecessor to an OpCo

Debtor. On July 25, 1979, the Doumanis sold their 50% interest in Tropicana Enterprises

to Adamar of Nevada Inc. (“Adamar of Nevada”), a subsidiary of Ramada Inns, Inc. As

a result, the Jaffe Group owned 50% of Tropicana Enterprises and Adamar of Nevada

owned the other 50%. The relevant corporate relationship can be illustrated as follows:

BAY:01608040v1

16

Thus, the Jaffe Group’s 50% interest in Tropicana Enterprises was the only outside

interest in the Tropicana Las Vegas that was not held directly or indirectly through a

subsidiary by Ramada Inns, Inc., which subsequently became known as Ramada, Inc.

1980 Trade Name Agreement

31. On or about September 1, 1980, Tropicana Enterprises entered into the

1980 Trade Name Agreement with Ramada Inns, Inc., the Jaffe Group, Hotel Ramada of

Nevada, and Adamar of New Jersey, Inc (another wholly owned subsidiary of Ramada

Inns, Inc.). This agreement expressly authorized Ramada Inns, Inc. to file federal

trademark registrations in its name for the “TROPICANA” mark. As a matter of

trademark law, registration may only be made in the name of the owner of the mark.

Those registrations were filed, as set forth below.

32. The 1980 Trade Name Agreement also provided a limited contingent

assignment right to benefit Tropicana Enterprises in the event that the hotel lease was

terminated prior to the extinguishment of that right. Since Tropicana Enterprises was

owned 50% by Adamar of Nevada (a wholly owned subsidiary of Ramada Inns, Inc.), the

contingent assignment right was effectively for the benefit of the holders of the only

outside ownership interest, the Jaffe Group. As described more fully below, the Jaffe

Group’s contingent assignment right was extinguished in 2002, when Aztar purchased the

Jaffe Group’s interest in Tropicana Enterprises. This brought the operation of the

Tropicana Las Vegas and the site of those operations under common ownership for the

first time since the opening of the Tropicana Las Vegas in 1957.

Ramada Inns, Inc. Registers the “TROP” Mark in 1982

33. On August 16, 1982, Ramada Inns, Inc. began using the mark “TROP” in

connection with casino services and hotel and restaurant services in Atlantic City, New

BAY:01608040v1

17

Jersey. On or about November 17, 1982, Ramada Inns, Inc. filed an application for

federal registration of TROP as a service mark for hotel and restaurant and casino

services. On March 13, 1984, the United States Patent & Trademark Office (“USPTO”)

issued Registration Number 1,270,320 (the “’320 Registration”) to Ramada Inns, Inc. as

the owner of the mark.

34. Ramada Inns, Inc. changed its name to Ramada, Inc. and on June 24,

1986, Ramada Inns, Inc. validly assigned its interest in the ’320 Registration to Ramada,

Inc. This assignment was recorded with the USPTO on July 19, 1986. The ’320

Registration remains valid today, and is currently held by New Tropicana Holdings.

35. Icahn Agency Services LLC has a recorded security interest in the ’320

Registration.

The 1988 and 1989 Registrations of the “TROPICANA” Trademark

36. On July 15, 1988, Ramada, Inc. filed an application to register

“TROPICANA” as a service mark.9 On March 14, 1989, Registration Number 1,530,186

(the “’186 Registration”) was issued to Ramada Inc. for use of “TROPICANA” mark in

connection with entertainment and hotel and restaurant services. The ’186 Registration

remains valid today, and is currently held by New Tropicana Holdings.


Registration.

9 Ramada Inns, Inc. previously filed an application for the federal registration of TROPICANA as a mark for hotel services and casino services on September 22, 1980. On April 6, 1982, Ramada Inns, Inc. was issued Registration Number 1,193,337 for use of “TROPICANA” as a service mark in casino and hotel services. This registration lapsed because it was not renewed.

BAY:01608040v1

18

38. On April 28, 1989, Ramada, Inc. filed an additional application for

“TROPICANA” as a service mark for casino services. On December 19, 1989,

Registration Number 1,572,514 (the “’514 Registration”) was issued to Ramada Inc. for

use of the TROPICANA service mark for casino services. The ’514 Registration remains

valid today, and is currently held by New Tropicana Holdings.


Registration.

Ramada Inc. Spins off its Gaming Assets to the Newly-Formed Aztar Corporation

40. In 1989, Ramada, Inc. decided to spin off its gaming assets and properties.

To effect the spin-off all of those assets and properties were transferred into a newly

formed subsidiary, Aztar. As part of the transfers, Ramada Inc. assigned the Tropicana

Trademarks to Aztar on July 5, 1989. The assignment included the ’320 Registration, the

’186 Registration, and the then pending application for the ’514 Registration. Aztar

recorded this assignment with the USPTO on July 10, 1989. The shares of Aztar were

subsequently distributed to Ramada, Inc’s public shareholders.

41. On December 20, 1989, Aztar, Ramada Inc., Hotel Ramada of Nevada,

Adamar of New Jersey, Inc., Tropicana Enterprises, the Jaffe Group, and TROP C.C.

entered into a Trade Name Agreement Assignment, Guaranty, and Agreement (the “1989

Agreement”).

42. Under the 1989 Agreement, Ramada assigned all of its rights under the

1980 Trade Name Agreement to Aztar and Ramada had the obligation to “transfer to

Aztar any and all trademark . . . registrations with respect to the name ‘Tropicana’ issued

or standing in the name of Ramada or any of its affiliates . . . .” The 1989 Agreement

was signed by all of the LandCo signatories to the 1980 Trade Name Agreement and

BAY:01608040v1

19

members of the Jaffe Group. All of these entities confirmed the validity of the

assignment of the ownership of the Tropicana Trademarks to Aztar by executing the 1989

Agreement.

Aztar Buys the Jaffe Group’s Remaining Interest; Extinguishes Contingent

Assignment Rights

43. In January of 2002, Adamar of Nevada (then a wholly-owned Aztar

subsidiary) and the Jaffe Group owned equal partnership interests in Tropicana

Enterprises – the lessor of the site of the Tropicana Las Vegas. The relevant corporate

relationship can be illustrated as follows:

44. On February 1, 2002, Aztar caused Adamar of Nevada to buy the Jaffe

Group’s 50% interest in Tropicana Enterprises (the “Jaffe Acquisition”). As a result,

Aztar became the beneficial owner of 100% of the equity interests in Tropicana

Enterprises and the operation of the Tropicana Las Vegas and the site of those operations

BAY:01608040v1

20

were now under common ownership for the first time since the opening of Tropicana Las

Vegas in 1957. The relevant corporate relationship can be illustrated as follows:

45. By purchasing the remaining 50% interest held by the Jaffe Group, Aztar

effectively rendered meaningless any contingent assignment right that Tropicana

Enterprises, or any of its successors, could have had in the Tropicana Trademarks,

because the grantor and grantee of the contingent assignment right were now one entity

under common ownership and management.

46. The context of this transaction is important. When the Jaffe Group had an

interest in Tropicana Enterprises, there was a reason for the Jaffe Group to have some

ability to prevent Aztar from using the Tropicana name elsewhere (either in competition

or in ways that might dilute the value of the brand) if Aztar were no longer operating the

Tropicana Las Vegas. When the 2002 Transaction brought the lessor and the lessee

under common ownership under the Aztar umbrella, however, there was no longer any

BAY:01608040v1

21

reason for the contingent assignment right to continue – which is precisely why it was

extinguished.

47. Aztar’s extinguishment of the contingent assignment right was expressly

memorialized in public filings with the SEC. For example, Aztar’s 2001 Form 10-K

(dated Mar. 7, 2002) – and filed one week after the Jaffe Acquisition – stated that on

“February 28, 2002, we [Aztar] completed the purchase of the other 50% partnership

interest in Tropicana Enterprises that we [Aztar] did not own and acquired unrestricted

rights to the [Tropicana] name.” Aztar, Form 10-K (Mar. 7, 2002) (Ex. A.) Aztar’s

subsequent Form 10-K filings were consistent, reciting Aztar’s sole and unrestricted

ownership of the Tropicana trademark. See Aztar, Form 10-K (Mar. 1, 2004) (Ex. B.);

Aztar, Form 10-K (Feb. 28, 2005) (Ex. C.); see also Aztar, Form 10-K (Feb. 27, 2003)

(Ex. D.) (restating above quoted language and further explaining, “As part of the [Jaffe]

[A]cquisition, the Company acquired the 50% interest in the Tropicana trademark, an

intangible asset with an indefinite life, that it did not already own as part of its interest in

the partnership. . . .”) Unrestricted ownership means complete ownership with no third-

party right to assignment based on any condition. The SEC filings belie any allegation by

Defendants that the contingent assignment right or the 1980 Trade Name Agreement that

reflected that interest was hidden from them. Rather, this further confirms what all

parties understood for decades and what this Court has already decided – that New

Tropicana Holdings and its OpCo Debtor predecessors (such as Tropicana Entertainment,

LLC and Aztar before it) owned the Tropicana Trademarks.

The 2004 Amended and Restated Trademark and Collateral Agreement

48. In 2004, Aztar, as borrower, entered into an Amended and Restated

Trademark and Collateral Agreement with Bank of America as the administrative agent.

BAY:01608040v1

22

(Ex. E.) This agreement, too, stated that Aztar owned the Tropicana Trademarks.

Significantly, except for the Jaffe Group (which no longer held an interest in any portion

of the enterprise), the 2004 Collateral Agreement was signed by all of the signatories to

the 1980 Trade Name Agreement, or their successors, thus confirming everybody’s

respective knowledge and agreement that Aztar was, in fact, the sole owner of the

Tropicana Trademarks.

Aztar and the Tropicana Trademarks are Sold for $2.1 Billion Dollars

49. On May 19, 2006, Wimar Tahoe Corporation purchased Aztar for $2.1

billion. The purchase transaction was structured so that Aztar became a subsidiary of

Wimar OpCo LLC (“Wimar OpCo”), and Wimar OpCo was intended to be the holding

company for the acquired assets. Wimar OpCo was later renamed Tropicana

Entertainment, LLC.

50. Aztar represented to Wimar Tahoe Corporation that it owned the


51. The $2.1 billion purchase of Aztar was financed through two separate

credit facilities: the OpCo Credit Facility and the LandCo Credit Facility. The OpCo

Credit Facility was comprised of a $1.53 billion secured term loan and a $180 million

secured revolver.

52. In connection with the closing of the OpCo Credit Facility, the OpCo

Debtors pledged as collateral any and all trademark assets they owned as set forth in

schedules of trademark assets. The OpCo Credit Facility schedules specifically identified

Aztar as the owner of the Tropicana Trademarks. As the legal owner of the Tropicana

Trademarks, Aztar validly pledged the Tropicana Trademarks as security to the OpCo

Lenders. Subsequently, on September 12, 2007, Aztar executed a written assignment of

BAY:01608040v1

23

its interest in the Tropicana Trademarks to Tropicana Entertainment, LLC, an assignment

that was promptly and validly recorded with the USPTO on September 13, 2007.

53. Tropicana Entertainment, LLC’s acquisition of record title in this fashion

extinguished all prior unrecorded interests purportedly held by any LandCo entity and

perfected Tropicana Entertainment, LLC’s ownership of the Tropicana Trademarks.

Tropicana Entertainment, LLC became the pledgor of the Tropicana Trademarks under

the OpCo Credit Facility.

54. In connection with the closing of the LandCo Credit Facility, the LandCo

Debtors were also required to identify all of the U.S. trademarks that they owned. They

did not identify any ownership or contingent interest in the Tropicana Trademarks.

55. The contents of the two schedules disclosing the respective pledges of the

OpCo and LandCo Debtors underscored what everyone believed concerning the

Tropicana Trademarks – that they were then owned by Aztar. All of the extensions of

credit under the OpCo Facility and the LandCo Facility and the actions and credit

decisions taken by the OpCo Lenders and LandCo Lenders were in reliance on that

understanding.

The Bankruptcy, and May 30, 2008 Cash Collateral Order

56. Tropicana Entertainment, LLC and most of its affiliates and subsidiaries,

filed for bankruptcy on May 5, 2008 in this Court.

57. On May 30, 2008, this Court entered the Cash Collateral Order. The

Order provided that the Liens under the OpCo Credit Facility were “valid, binding,

perfected, enforceable, first priority liens on the personal and real property described in

the” OpCo Credit Facility. (¶ D(4); see ¶ 37(c)(ii).) The OpCo Credit Facility schedule

BAY:01608040v1

24

shows Tropicana Entertainment, LLC’s ownership interest in and specifically lists the

Tropicana Trademarks as collateral.

58. Given that a valid ownership interest is a prerequisite for a valid lien on

title, the Cash Collateral Order confirms that Tropicana Trademarks were owned by

Tropicana Entertainment, LLC.

59. The Cash Collateral Order contained a 90-day challenge period for any

party-in-interest to investigate and challenge the validity of the OpCo Lenders’ liens.10

At no time during the challenge period did any party – including Onex and other LandCo

Lenders – challenge any of the OpCo Lenders’ liens. Indeed, the LandCo Lenders did

not even take any discovery concerning the liens during the challenge period.

60. The Cash Collateral Order expressly stated that no “grant of security under

this [Cash Collateral] [O]rder or the [DIP financing documents] . . . shall be stayed,

restrained, voidable or recoverable . . . , or subject to any defense, reduction, setoff,

recoupment or counterclaim” after the challenge period. (¶ 5.)

61. In addition, the LandCo and OpCo Debtors waived and released the OpCo

agent and OpCo Lenders from any and all claims arising out of the OpCo Credit Facility,

including the extent, validity, priority and perfection of liens in the Tropicana

Trademarks. (Cash Collateral Order, ¶ 37(a).) This waiver and release is binding on the

Reorganized LandCo Debtors.

62. The Cash Collateral Order also provided that any other party-in-interest’s

claims against the OpCo Credit Facility agent and the OpCo Lenders would be forever

relinquished, released and waived after the expiration of the 90-day challenge period. (¶

10 That challenge period was extended by 33 days for the Unsecured Creditors Committee at its request while the committee investigated the OpCo Lenders’ liens.

BAY:01608040v1

25

37(b) and (c).) This waiver and release is binding on the LandCo Lenders, including

Onex, now the owners of the Reorganized LandCo Debtors.

63. The Cash Collateral Order is binding on the Debtors and their respective

successors and assigns. (¶ 30.) As such, the Cash Collateral Order is binding on the

Defendants as successors to LandCo Debtors.

The Debtors’ Schedules of Assets and Liabilities in July of 2008

64. On July 7, 2008, the OpCo and LandCo Debtors each filed separate

schedules of their assets and liabilities. Tropicana Entertainment, LLC filed schedules of

assets and liabilities that listed the Tropicana Trademarks as assets. (Ex. F.) The LandCo

Debtors’ schedules did not assert any interest, ownership or otherwise, in the Tropicana

Trademarks.

65. All parties relied upon the foregoing schedules of assets and liabilities. In

loaning $150 million to the OpCo Debtors, the OpCo Exit Facility Lenders relied upon

the Tropicana Trademarks as security for the OpCo Exit Facility. Without that valuable

property as security, the loan would have been far riskier, and the OpCo Exit Facility

Lenders would not have extended the funds necessary for the OpCo Debtors to

reorganize.

66. By contrast, the LandCo Lenders acquired interests in the $440 million

LandCo secured term loan under the LandCo Credit Facility without any reliance on the

Tropicana Trademarks as security – because all parties recognized that the LandCo

Debtors had no interest, ownership or otherwise, in the Tropicana Trademarks.

The Confirmation Order

67. Since there were insufficient assets to satisfy the secured obligations under

the LandCo Credit Facility and the OpCo Credit Facility, the decision was made to file

BAY:01608040v1

26

two separate plans of reorganization. The LandCo Plan concerned only the Tropicana

Las Vegas casino, while the OpCo Plan concerned all of the Debtors’ remaining casinos.

The OpCo and LandCo Plans provided that the secured OpCo and LandCo Lenders

would take an equity and management interest in the reorganized OpCo and LandCo

debtors, respectively, and that post-bankruptcy, the reorganized OpCo and LandCo

entities would operate as separate enterprises.

68. During the negotiations over the terms of the OpCo and LandCo plans, the

OpCo Debtors, consistent with their ownership rights, advised the LandCo Lenders (the

future owners of the Reorganized LandCo Debtors) that the Reorganized LandCo

Debtors would need to obtain a license from the OpCo Debtors to use the Tropicana

Trademarks after the plans became effective. The LandCo Lenders requested that the

OpCo Debtors provide them with a draft term sheet for such a license, but then balked at

the idea of paying any fees for use of the Tropicana Trademarks. The OpCo Debtors

rejected the LandCo Lenders’ request to use the Tropicana Trademarks for free, in

perpetuity, and without control of the trademarks by the Reorganized OpCo Debtors.

69. To move forward on the reorganization, the parties agreed to postpone the

dispute over whether the LandCo Debtors had to pay a royalty to use the Tropicana

Trademarks, and if so, at what rate, to a later time. Accordingly, the parties preserved the

status quo with respect to intellectual property in the Plans – recognizing that the OpCo

Debtors owned the Tropicana Trademarks but that the LandCo Debtors may or may not

have had a right to use the Tropicana Trademarks, and if so, could they use it without

BAY:01608040v1

27

paying a royalty.11 Nothing in the reservation of rights expanded the rights of the

LandCo Debtors to the Tropicana Trademarks, nor waived any rights the OpCo Debtors

or OpCo Lenders had to rely upon and enforce the various orders of this Court that were

and remain binding.

70. On May 5, 2009, this Court issued the Confirmation Order for the OpCo

Plan. The OpCo Plan went effective on March 8, 2010.

71. The Confirmation Order for the OpCo Plan approved and authorized the

execution of the OpCo Exit Facility, and held that the OpCo Exit Facility liens are “valid,

binding, perfected and enforceable liens and security interests in the real and personal

property described in the OpCo Exit Facility and its attendant documents.” The

Confirmation Order further stated that “the granting of such Liens, the making such loans

and other extensions of credit, and the execution and consummation of the OpCo Exit

Facility shall not be subject to avoidance, recharacterization, recovery, subordination,

attack, offset, counterclaim, defense or ‘claim’ (as such term is defined in the Bankruptcy

Code) of any kind under any Applicable Laws as of the Effective Date.” The

Confirmation Order effectively confirms the ownership by an OpCo Debtor of the

Tropicana Trademarks with no right in any LandCo Debtor to a conditional assignment.

11 (See OpCo Plan, Article XIII.Q; see also Tr. of Hearing on Motion for Relief from Stay Aug. 13, 2009, p. 40:10-11 (The Reorganized LandCo Debtors’ counsel stated that “[w]e seek a remedy for OpCo’s postpetition attempt to take away our right to use the name.”); Tropicana Las Vegas, Inc’s Reply Brief in Support of Motion for Relief from Stay, p. 1 (Docket No. 2290) (The Reorganized LandCo Debtors argued that “the OpCo Debtors . . . invented an alleged right to terminate Tropicana Las Vegas’ ongoing use of the [Tropicana] name and attempted to exploit that alleged right to extract royalties even though none had ever been paid before.”))

BAY:01608040v1

28

72. On May 5, 2009, the Court also issued a confirmation Order for the

LandCo Plan. The LandCo Plan went effective on July 1, 2009. (Docket No. 2203.) The

LandCo Plan did not claim any ownership interest in the Tropicana Trademarks.

73. The Reorganized LandCo Debtors never expected an ownership interest in

the Tropicana Trademarks. In fact, the OpCo Plan allocates significant value to the


The Nevada Action

74. On July 20, 2009, the Defendants filed the Nevada Action seeking a

declaration that the Defendants have a right to use the Tropicana Trademarks in

connection with the Las Vegas resort and casino property without control by or payment

to the OpCo Debtors.

75. In connection with the motion practice surrounding the lifting of the

automatic stay to permit the Nevada Action to proceed, the LandCo Debtors expressly

assured this Court that they were not seeking any ownership of the Tropicana Trademarks

in the Nevada Action. Counsel for Reorganized LandCo Debtors said “Tropicana Las

Vegas is not ‘contemplating postpetition activity’. . . . Tropicana Las Vegas is also not

challenging ‘ownership questions’ that were ‘plainly answered’ prepetition – it is seeking

to preserve longstanding rights” concerning the use of the Tropicana name without a

royalty. (Reply in Support of Motion for Relief from Stay, p. 5) (emphasis added.) This

was confirmed multiple times by counsel for the Reorganized LandCo Debtors on the

record at the hearing on the motion, who stated:

[T]he relief sought in that complaint is exceedingly simple, it’s nothing more then a declaration that Tropicana Las Vegas may continue to operate the Tropicana under the Tropicana name without interference by OpCo or payment to them. That’s it. There’s no request for damages, no

BAY:01608040v1

29

attempt to say what OpCo can or cannot do with the mark. No attempt to limit the rights that OpCo had as of the petition date. Just a straightforward request to preserve what we view as our pre-existing right to operate as we’ve always done.

. . . . [N]othing in the litigation asserts that the OpCo debtors don’t have the right to use the name on the properties that they’re using it now or even to develop new properties with it. All that we’re asking for is Las Vegas centric. We want to continue to use the property that’s located on the corner of Tropicana Avenue and the strip that’s been named the Tropicana ever since it was built. We want to just continue to do that.

(Tr. at 33 and 43.)

76. In permitting the Nevada Action to proceed, this Court relied upon the

representations by the Reorganized LandCo Debtors’ counsel. Specifically, the Court

lifted the stay after finding in its ruling that “there is no dispute that one of the OpCo

entities is the record owner of the intellectual property in dispute as a matter of record.”

(Tr. at. 52-53.)

77. The Nevada Action was removed to federal court. As part of the motion

to remand the case back to Nevada state court, the Defendants made even more

representations that they were not challenging ownership of the Tropicana Trademarks.

Specifically, the Defendants stated in their opening brief:

[Tropicana Las Vegas, Inc. and Hotel Ramada of Nevada] seek a declaration, under Nevada Revised Statute 30.101, that they have a right to use the name they have been using in Las Vegas since 1957. The Complaint does not dispute [Tropicana Entertainment, LLC and Aztar’s] trademark

rights, and/or their right to use the “Tropicana” name.

(Motion to Remand Aug. 25, 2009, p. 4) (emphasis added.) And yet again in their reply

brief, Defendants stated that:

BAY:01608040v1

30

The Complaint contains no allegations regarding [Tropicana Las Vegas, Inc. and Hotel Ramada of Nevada’s] rights vis-à-vis the specific federal registrations trumpeted by [Tropicana Entertainment, LLC and Aztar] in their Opposition; it alleges only that [Tropicana Las Vegas, Inc. and Hotel Ramada of Nevada] have a right to use the Tropicana name based on [Nevada] state law contract

principles and estoppel.

(Reply in Support of Motion to Remand Sept. 23, 2009, p. 5) (emphasis added.)

The LandCo Debtors File Invalid Supplemental Schedules

78. On November 18, 2009, certain LandCo Debtors filed supplemental

schedules of assets and executory contracts – long after the 30-day deadline provided in

the LandCo Plan confirmation order. These schedules – filed some 18 months after the

Cash Collateral Order, 6 months after the Confirmation Order, and 4 months after the

LandCo Plan’s Effective Date – listed for the very first time a property interest in the

“name ‘Tropicana’ and the goodwill of the business symbolized by and associated with

the name ‘Tropicana.’” (Ex. G.) The supplemental schedules do not assert any interest

in the “Trop” name. The supplemental schedules also listed the 1980 Trade Name

Agreement as an executory contract. (Exs. G, H and I.)

BAY:01608040v1

31

Tropicana Las Vegas Seeks Ownership of the Tropicana Trademarks

79. On January 8, 2010, Tropicana Las Vegas moved for summary judgment

in the Nevada Action. Even though the complaint had merely concerned the dispute over

the use of Tropicana name without a fee – and there had been multiple representations

that Defendants would not seek ownership of the Tropicana Trademarks – the summary

judgment motion requested a declaration that the Reorganized LandCo Debtors owned

the Tropicana Trademarks.

80. Subsequently, the Defendants confirmed their intentions to litigate

ownership, stating:

[O]wnership of the Tropicana name is undoubtedly vested

in Plaintiff Tropicana Las Vegas, Inc., as the Court will

shortly determine. If there were no Interim Period provision protecting their use, Defendants have been infringing and will be subject to damages.

. . . .

Once the Interim Period ends on May 7, 2010, if Defendants continue to use the name Tropicana, Plaintiffs will then be entitled to file a new Complaint seeking damages for trademark infringement based on their history of use and ownership and the historical agreements–documents that conclusively establish that Plaintiffs alone own the trademark rights.

(Reply in Support of Motion to Dismiss Counterclaim in Nevada Action, pp. 3 n.1 and 8)

(emphasis added.)

81. The request for a declaration of ownership from the Nevada Court

effectively amounted to a request for an improper sub rosa plan modification.

Defendants failed to advise the Nevada Court that the issue of ownership had already

been resolved both prepetition and post-petition by this Court in connection with the

BAY:01608040v1

32

Cash Collateral Order and then again in the confirmation orders finalizing the

reorganizations, valuations and distributions under the Plans. Defendants also flatly

misrepresented to the Nevada Court during oral argument on the summary judgment

motion on May 12, 2010 that the question of ownership of the Tropicana Trademarks had

been “punted” to the Nevada Court to adjudicate, with the “express permission of the

United States Bankruptcy Court, having jurisdiction over both sides of the bankruptcy.”

(Tr. of Nevada Court Hearing on Summary Judgment Apr. 15, 2010 at 9:9-14.)

82. The Nevada Court denied the Reorganized LandCo Debtors’ motion for

summary judgment, and indicated that it needed direction from this Court. Reluctant to

address the legal status of the LandCo Debtors’ supplemental bankruptcy schedules that

purported to add a property interest in the Tropicana Trademarks, the Nevada Court

stated at the May 12, 2010 oral argument that it “assume[d] that somebody will ask the

Bankruptcy Court judge to do something.” (Tr. of Nevada Court Hearing on Summary

Judgment Apr. 15, 2010 at 101:20-21.) The Nevada Court further underscored the need

for this Court’s guidance on the validity and effect of the 1980 Trade Name Agreement,

finding that that “[w]hether the Bankruptcy Court has ruled on the status of the

reversionary interest is unclear.” (Findings of Fact and Conclusions of Law Jun. 9, 2010,

¶ 77.)

83. This Court should not countenance the Defendants’ attempts to

circumvent this Court’s prior Orders. This Court has already determined that – as all

parties have understood for many years – the ownership of the Tropicana Trademarks

resided with an OpCo Debtor (now with one of the Reorganized OpCo Debtors). Had the

Defendants (or their owners, the former LandCo Lenders) wished to litigate that issue,

BAY:01608040v1

33

they had multiple opportunities to do so during the bankruptcy proceedings. They failed

to do so. The Nevada Action is not the proper forum to raise that issue, after the fact.

FIRST CAUSE OF ACTION

(Declaratory Judgment that the Tropicana Trademarks were property of the OpCo

Debtors’ Estate under Section 541(a) of the Bankruptcy Code)

84. Plaintiffs hereby repeat and reallege the allegations contained in

paragraphs 1 through 83 of this Complaint as if fully restated herein.

85. As a result of the Defendants’ improper attempt to litigate ownership

issues in the Nevada Action, an actual controversy exists concerning the validity and

enforceability of the factual findings in the Court’s Cash Collateral Order and

Confirmation Order and the underlying ownership issues subsumed therein.

86. A declaration from this Court enforcing its prior Cash Collateral Order

and Confirmation Order and declaring that the Tropicana Trademarks were property of

the Tropicana Entertainment, LLC’s estate under Section 541(a) of the Bankruptcy Code,

and are now validly owned by New Tropicana Holdings, will promote a resolution of this

controversy and prevent an impermissible sub rosa plan modification. Additionally, the

Defendants’ collateral attack on this Court’s prior orders would cause a default under the

Exit Facility Credit Agreement if the Nevada state court were to find that the Tropicana

Trademarks are not the property of New Tropicana Holdings. That result, in addition to

invalidating this Court's finding in the Confirmation Order that the Exit Facility

Agent has a valid and perfected security interest in the Tropicana Trademarks, might lead

to the acceleration of the Exit Credit Facility and the insolvency of the Reorganized

OpCo Debtors.

BAY:01608040v1

34

87. Since the commencement of this bankruptcy, the Tropicana Trademarks

were the property of Tropicana Entertainment, LLC’s bankruptcy estate and not subject

to any contingent assignment right. This fact was confirmed by the Cash Collateral

Order and the Confirmation Order. Further, the Cash Collateral Order confirmed that the

OpCo Lenders had a valid and perfected security interest in the Tropicana Trademarks.

In implementing the OpCo Plan, the Tropicana Trademarks were conveyed to Tahoe

Horizon LLC which, in turn, conveyed them to New Tropicana Holdings.

88. Therefore, the Court should declare that the Tropicana Trademarks were

property of the Tropicana Entertainment, LLC’s estate under Section 541(a) of the

Bankruptcy Code, that the prepetition OpCo Lenders had a valid lien in the Tropicana

Trademarks that they released in exchange for the Plan distributions, and that the

Tropicana Trademarks are now validly owned by New Tropicana Holdings.

SECOND CAUSE OF ACTION

(Declaratory Judgment that the Exit Facility Agent Has a Valid and Perfected

Security Interest for the Benefit of the OpCo Exit Facility Lenders in the Tropicana

Trademarks)



90. An actual controversy exists concerning whether the Exit Facility Agent

has a valid and perfected security interest in the Tropicana Trademarks for the benefit of

the OpCo Exit Facility Lenders.


and Confirmation Order and declaring that OpCo Exit Facility Lenders have a valid and

perfected security interest in the Tropicana Trademarks will promote a resolution of this

controversy.

BAY:01608040v1

35

92. The Tropicana Trademarks were the property of Tropicana Entertainment,

LLC’s bankruptcy estate that was validly pledged to the OpCo Exit Facility Lenders

pursuant to the OpCo Plan. The Court’s Confirmation Order confirms this.

93. Therefore, the Court should declare that the Exit Facility Agent has a valid

and perfected security interest in the Tropicana Trademarks for the benefit of the OpCo

Exit Facility Lenders.

THIRD CAUSE OF ACTION

(Declaratory Judgment that LandCo’s Supplemental Bankruptcy Schedules are

Null and Void)



95. An actual controversy exists concerning whether the LandCo’s

supplemental schedules are proper.


and Confirmation Order and declaring that the LandCo’s supplemental schedules are null

and void will promote a resolution of this controversy.

97. The LandCo Debtors submitted the supplemental schedules to this Court

in November of 2009 – four months after the LandCo Plan Confirmation Date and in

contravention of the express language of the reservation of rights provisions in both the

LandCo and OpCo Plans. The supplemental schedules are therefore untimely and

prejudicial.

98. Therefore, the Court should declare that the LandCo’s Supplemental

Bankruptcy Schedules are null and void.

BAY:01608040v1

36

FOURTH CAUSE OF ACTION

(Declaratory Judgment that the Nevada Action Violated the Automatic Stay and is

Therefore Void)



100. An actual controversy exists concerning whether the Nevada Action is a

proper forum for litigating trademark ownership issues.

101. A declaration from this Court that Defendants violated the automatic stay

(which was in effect until the OpCo Plan’s March 8, 2010 Effective Date) by raising

trademark ownership issues in the Nevada Action before the OpCo Plan Effective Date,

will promote a resolution of this controversy.

102. The Defendants repeatedly represented to this Court that only permissive

use issues would be litigated in the Nevada Action. Despite their representations, the

Defendants willfully raised trademark ownership issues in the Nevada Action before the

OpCo Plan’s March 8, 2010 Effective Date.

103. Therefore, the Court should declare that, pursuant to Bankruptcy Code §

362(a)(1) and (3), the Nevada Action is void and without effect, to the extent it purports

to address trademark ownership issues.

104. Furthermore, the Court should enjoin the Defendants from litigating

ownership of the Tropicana Trademarks in the Nevada Action or in any other forum.

FIFTH CAUSE OF ACTION

(Contempt of the Confirmation Order)



BAY:01608040v1

37

106. The OpCo Plan provides that the automatic stay remained in effect until

the March 8, 2010 Effective Date.

107. The Confirmation Order confirmed the validity of this provision in the

OpCo Plan.

108. By willfully and intentionally asserting ownership over the Tropicana

Trademarks, despite numerous representations to the Court to the contrary, Defendants

have acted in contempt of the Confirmation Order.

109. Therefore, Plaintiffs seek the maximum penalty or sanction deemed

appropriate by the Court, including compensatory damages and attorneys’ fees and

expenses.

SIXTH CAUSE OF ACTION

(Enjoining the Defendants Under the Discharge and Injunctive Provisions of the

OpCo Plan as Confirmed by the Confirmation Order)



111. The Defendants’ litigation of trademark ownership rights in the Nevada

Action violated the discharge and injunctive provisions of the OpCo Plan.

112. These provisions were confirmed by the Confirmation Order.

113. Accordingly, pursuant to the OpCo Plan as confirmed by the Confirmation

Order, the Court should enjoin the Defendants from litigating the ownership of the

Tropicana Trademarks in the Nevada Action or in any other forum.

SEVENTH CAUSE OF ACTION

(Injunctive Relief Pursuant to Fed. R. Bankr. P. 7065)



BAY:01608040v1

38

115. Without injunctive relief enjoining the Defendants and their affiliates from

prosecuting ownership issues in the Nevada Action, the Nevada state court may issue a

decision that will conflict with this Court’s prior Cash Collateral and Confirmation

Orders and upset the settled plan valuations and distributions in these bankruptcy

proceedings.

116. In the event the Nevada state court finds that the Tropicana Trademarks

belong to Tropicana Las Vegas, Inc., the Plaintiffs will suffer immediate and irreparable

harm for which they will have no adequate legal remedy.

117. Therefore, the Court should enjoin the Defendants from litigating the

ownership of the Tropicana Trademarks in the Nevada Action or any other forum.

EIGHTH CAUSE OF ACTION

(Injunctive Relief Pursuant to Bankruptcy Code § 105)



119. Alternatively, if injunctive relief is not granted under Bankruptcy Code §

362, the discharge and injunction provisions of the OpCo Plan, or Fed. R. Bankr. P. 7065,

then injunctive relief is proper under Bankruptcy Code § 105.

120. By raising ownership issues in the Nevada Action, Defendants are

launching a collateral attack on this Court’s Cash Collateral Order and its Confirmation

Order.

121. Therefore, the Court should enjoin the Defendants from litigating the

ownership of the Tropicana Trademarks in the Nevada Action or any other forum

pursuant to Bankruptcy Code § 105.

BAY:01608040v1

39

NINTH CAUSE OF ACTION

(Declaratory Judgment that Irrespective of Who Owns the Tropicana Trademarks

that the Exit Facility Agent Has a Valid and Perfected Security Interest for the

Benefit of the OpCo Exit Facility Lenders in the Tropicana Trademarks)



123. An actual controversy exists concerning whether the Exit Facility Agent

has a valid and perfected security interest in the Tropicana Trademarks for the benefit of

the OpCo Exit Facility Lenders.

124. Pursuant to the Cash Collateral Order and the Confirmation Order, the

Court should find that New Tropicana Holdings owns the Tropicana Trademarks.

However, if the Court determines that New Tropicana Holdings does not own the

Tropicana Trademarks (notwithstanding its prior orders), then such a finding will create

an event of default under the OpCo Exit Facility Agreement. As such, a declaration from

this Court enforcing its Confirmation Order and declaring that the OpCo Exit Facility

Lenders have a valid and perfected security interest in the Tropicana Trademarks –

irrespective of who owns the Tropicana Trademarks – will promote a resolution of this

controversy.

125. The Court’s Confirmation Order confirms that the OpCo Exit Facility

Lenders have a valid and perfected security interest in the Tropicana Trademarks. The

OpCo Exit Facility Lenders relied on the Confirmation Order in loaning $150 million

dollars in exit financing to the Reorganized OpCo Debtors. Thus, even if the Court finds

that New Tropicana Holdings did not own the Tropicana Trademarks (which it should not

conclude), then the Court should find that the Exit Facility Agent has a valid and

BAY:01608040v1

40

perfected security interest in the Tropicana Trademarks on behalf of the OpCo Exit

Lenders as confirmed in the Confirmation Order.

126. Therefore, the Court should declare that the Exit Facility Agent has a valid

and perfected security interest in the Tropicana Trademarks for the benefit of the OpCo

Exit Facility Lenders irrespective of who owns the Tropicana Trademarks.

TENTH CAUSE OF ACTION

(Unjust Enrichment)



128. The OpCo Lenders voted to accept the OpCo Plan and agreed to accept

equity interests in New Tropicana in satisfaction of their claims and further agreed not to

seek any recoveries from the LandCo Debtors based upon the understanding that the

Tropicana Trademarks, which were of significant value, would be included in the assets

of the Reorganized OpCo Debtors.

129. If the Court determines, or allows the Defendants to proceed with

litigation in another court that results in a ruling that New Tropicana Holdings does not

own the Tropicana Trademarks, then the recoveries by the OpCo Lenders under the

OpCo Plan will be drastically reduced as the value of the Tropicana Trademarks will not

be reflected in the equity interests distributed to the OpCo Lenders in exchange for their

secured claims, and the value of the equity interests in the Reorganized LandCo Debtors

will be concomitantly increased without proper compensation to the OpCo Lenders.

Thus, under such circumstances, damages should be awarded to the OpCo Lenders in an

amount equal to the loss in value resulting from the change in ownership of the Tropicana

Trademarks.

BAY:01608040v1

41

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, pray for judgment against Defendants, as follows:

(a) That the Court issue a declaratory judgment declaring that:

i. the Tropicana Trademarks were property of the Tropicana

Entertainment, LLC’s estate under Section 541(a) of the

Bankruptcy Code and New Tropicana Holdings is the sole owner

of the Tropicana Trademarks;

ii. that Icahn Agency Services LLC has a valid and perfected security

interest in the Tropicana Trademarks for the benefit of the OpCo

Exit Facility Lenders;

iii. the LandCo Debtors’ supplemental bankruptcy schedules are null

and void;

iv. the Nevada Action violated the automatic stay to the extent it

called into question Plaintiffs’ trademark ownership rights and

security interests therein;

v. Icahn Agency Services LLC has a valid and perfected security

interest in the Tropicana Trademarks for the benefit of the OpCo

Exit Facility Lenders irrespective of whether New Tropicana

Holdings owns the Tropicana Trademarks; and

vi. In the event that the Tropicana Trademarks are not deemed the

property of the Tropicana Entertainment, LLC’s estate under

Section 541(a) of the Bankruptcy Code and New Tropicana

Holdings is not the sole owner of the Tropicana Trademarks, Icahn

BAY:01608040v1

42

Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master

Fund II LP, Icahn Partners Master Fund III LP and all the former

OpCo Lenders are entitled to damages equal to the loss in value

resulting from the change in ownership of the Tropicana

Trademarks, which shall be determined at trial.

(b) That the Court grant a permanent injunction prohibiting the Defendants

and their affiliates from any further attempts to litigate ownership issues

concerning the Tropicana Trademarks in any jurisdiction;

(c) Costs in bringing this action; and

(d) Such other and further relief as the Court may deem just and proper.

Dated: August 10, 2010 BAYARD, P.A.

/s/ Justin R. Alberto

Charlene D. Davis (DE Bar No. 2336) Justin R. Alberto (DE Bar No. 5126) 222 Delaware Avenue, Suite 900 Post Office Box 25130 Wilmington, Delaware 19801 Telephone: (302) 655-5000 Facsimile: (302) 658-6395

– and –

SONNENSCHEIN NATH &

ROSENTHAL LLP

Peter D. Wolfson (admitted pro hac vice) David R. Baum (pro hac vice forthcoming) Jo Christine Reed Ben Delfin 1221 Avenue of the Americas New York, New York 10020 Telephone: (212) 768-6700 Facsimile: (212) 768-6800

BAY:01608040v1

43

Attorneys for Plaintiffs Icahn Agency

Services LLC, Icahn Partners LP, Icahn

Partners Master Fund LP, Icahn Partners

Master Fund II LP and Icahn Partners

Master Fund III LP

RICHARDS, LAYTON & FINGER, P.A.

/s/ Daniel J. DeFranceschi

Daniel J. DeFranceschi (DE Bar No. 2732) Lee E. Kaufman (DE Bar No. 4877) One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302) 651-7700 Facsimile: (302) 651-7701

– and –

PROSKAUER ROSE LLP

James H. Shalek (admitted pro hac vice) Scott K. Rutsky (pro hac vice forthcoming) Richard J. Corbi (pro hac vice forthcoming) 1585 Broadway New York, New York 10036 Telephone: (212) 969-3000 Facsimile: (212) 969-29000

Attorneys for Plaintiffs Tropicana

Entertainment Inc and New Tropicana

Holdings, Inc.

17681653

Tropicana Trademark Lawsuit

Documents

Transcript of Tropicana Trademark Lawsuit