The fate of the Trump Taj Mahal Casino rests in the hands of a federal bankruptcy court judge who will issue a ruling on whether or not to cancel the casino’s union contract on Friday, October 17, in what the casino’s owners are calling a “life-or-death” decision.
Trump Entertainment Resorts and billionaire investor Carl Icahn maintain that the Taj Mahal will only survive if it gets the financial weight of the union contract and its associated pension and health care costs off its shoulders.
Allan Brilliant, Icahn’s lawyer, told US Bankruptcy Judge Kevin Gross that if the union contract isn’t dissolved, the Trump Taj Mahal will become the fifth Atlantic City casino to close its doors this year. “If you don’t grant the … motion, it’s just not viable as a business,” the Associated Press quoted Brilliant saying. “Ultimately, very quickly the casino will close. This is the window here; the window is open.”
Icahn owns the Taj’s $286 million debt and his rescue plan involves swapping that debt for ownership of the Taj while also contributing another $100 million in investments. However, his proposal requires concessions from the other side, most notably the dissolution of the costly union contract and massive tax breaks from local and state governments. The proposed tax breaks, which include lower property assessments and $25 million in credits from the state, have already been shot down.
The company then revised its proposal with a relief program involving “payments in lieu of taxes” and the company’s inclusion in two state economic grant programs—the Economic Redevelopment Grant and the Urban Revitalization Grant—that casinos aren’t entitled to.
Icahn wants to scrap the union contract in lieu of a program that entitles workers to $2,000 in stipends and leaves them to look for their own coverage under the jurisdiction of the state’s Affordable Care Act.
Union lawyer Kathy Krieger accused Icahn of trying to profit at the expense of the Trump Taj Mahal’s employees.
“Let’s look at the poorest of the stakeholders here and make sure they give up everything permanently before we’re even willing to move,” Krieger told the AP. “That’s absolute nonsense.”
