Mar. 10, 2010--His critics, including rival Donald J. Trump, have labeled him an opportunist more interested in short-term profit than in reinvesting in companies for the long haul.

Billionaire financier Carl Icahn dismisses such talk as "completely fallacious."

"I think we've done quite well buying troubled companies," Icahn said by phone yesterday from his New York office, where he runs, according to Forbes magazine, a $9 billion empire. "We buy, generally, companies that are cheap -- sort of not too popular that we think are a good value -- and become activist and get involved in cutting costs and putting money in them and making them better."

The 1957 Princeton University graduate ticked off some of the companies he's acquired and reaped big profits from: ImClone, American Railcar Leasing, Philip Services, Excel, National Energy, Federal-Mogul.

"In each of these areas, we have not only purchased the companies, but have invested hundreds of millions of dollars in them," Icahn said. "In the case of the rail cars, we invested over a billion dollars."

Now, he is focused on expanding his casino holdings, wagering on Atlantic City when other gambling companies and investors have turned elsewhere.

"A lot of people don't like Atlantic City," Icahn, 74, said. "They think it's a terrible environment for casinos. But when investors dislike something, that's often when you should buy."

He has his eye on acquiring the three Trump casinos in a bankruptcy-court battle that has pit him against Trump himself, the bondholders, and Trump Entertainment Resorts Inc., the company that owns the casinos.

Closing arguments are scheduled to begin at 1 p.m. today in U.S. Bankruptcy Court in Camden before Judge Judith H. Wizmur. She is expected to announce the winning plan sometime next month.

Unlike Donald Trump, who testified in court two weeks ago, Icahn did not testify and delivered only a video deposition last month as part of opening arguments.

Yesterday, his point man, Vincent J. Intrieri, senior managing director of Icahn Partners L.P. -- the hedge fund controlled by Icahn -- took the stand for nearly three hours to blow holes in the Trump Entertainment/bondholders plan.

"I think the fact that this enterprise for a long time has been significantly leveraged has impacted its ability to compete with the properties it purportedly competes with," Intrieri said.

He also diminished the value of the Trump brand on the three casinos.

"We don't think people go to a casino because it has the Trump name," Intrieri said. "They go for the quality of the product, service, types of amenities it has, and the condition it's in. No one goes to a casino because of the name."

Trump Entertainment filed for bankruptcy in February 2009.

Last month, the company and the bondholders laid out a restructuring plan that would inject $225 million in equity into Trump Entertainment and place about 5 percent of the firm with Donald Trump himself, with rights to buy an additional 5 percent. It also would guarantee the continued use of the Trump name on the casinos.

Icahn has bought a majority of the $486 million mortgage on the Trump casinos held by Dallas-based Beal Bank. He proposes to convert the loan into ownership of the casinos and wipe out the company's debt.

The Icahn team has focused on three key issues: that the Trump casinos are mired in debt and in deep financial trouble; that Icahn has the resources to turn them around; and that the bondholders/company plan is not feasible and deeply flawed.

"Our plan is better because, number one, there would be no debt on these casinos," Icahn said. "We have had experience running casinos."

In 2000, he said, he purchased four decrepit casinos in Las Vegas -- the Stratosphere, Arizona Charlie's Boulder, Arizona Charlie's Decatur, and Aquarius Casino Resort -- paying about $200 million to $300 million for them. He sold the four casinos on Feb. 21, 2008, for $1.3 billion, or roughly $1 billion more than he paid for them.

"We cleaned them up and sold them to a group owned by Goldman Sachs. Those casinos are still running," Icahn said.

In 1998, the Sands on the Boardwalk filed for bankruptcy. In 2000, Icahn came in and paid $65 million for the casino. He sold the property to Pinnacle Entertainment Inc. of Las Vegas in late 2006 for $275 million. The Sands was imploded in October 2007.

If Icahn prevails with Trump Entertainment, it will mark a significant shift in the balance of power in Atlantic City. A court victory would give him control of four of its 11 casinos.

Last week, the New Jersey Casino Control Commission signed off on the transfer of the troubled Tropicana to Icahn, who led a group of investors that bought the casino for $200 million in a bankruptcy auction last summer. The sale closed Monday.

All told, Icahn now has a portfolio of nine casinos in New Jersey, Nevada, Mississippi, Louisiana and Indiana. Last month, he took over the bankrupt Fountainbleau Casino Resort under construction on the Vegas Strip.

Despite remarks in his video deposition, Icahn said yesterday that he was noncommittal on selling both the Trump Marina and Trump Plaza casinos. He said Trump Plaza holds strategic value because of its central Boardwalk location.

"If you put on big events, you might want to keep the Plaza because it's right next to Boardwalk Hall," he said. "One of the things that has to be done is to bring the big shows back to differentiate yourself as a seaside resort."

Of his reputation as a billionaire takeover artist, he said, "I really sort of enjoy doing it. I think over the years I've become pretty good at it.

"I'm certain I would not enjoy retirement nearly as much as what I do," he said. "I can't imagine spending my days hitting a golf ball."

Contact staff writer Suzette Parmley at 215-854-2594 or [email protected].

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