Icahn offer to Taj Mahal union; Brookfield playing mind games with Revel deal?

TAGs: Brookfield Asset Management, Carl Icahn, revel, trump taj mahal

carl-icahn-trump-taj-mahal-unite-hereAtlantic City’s Trump Taj Mahal casino may be spared the axe after billionaire investor Carl Icahn reportedly offered an olive branch to the casino’s unionized workers. Icahn, who holds the majority of the Taj’s debt, had threatened to close the casino by Dec. 12 unless he received significant concessions from the Taj’s unionized workers and $175m in corporate welfare from AC and the state of New Jersey.

On Friday, the New York Post reported that Icahn had offered to restore healthcare benefits for the Taj’s 1,100 unionized workers as well as ‘some’ pension benefits. In exchange, Icahn wants the Unite Here union to drop its appeal of the court ruling that allowed Icahn to void the union’s contract, including its medical and pension plans. The deal would allow Taj workers to remain unionized.

The Post also reported that Gov. Chris Christie and State Senate President Stephen Sweeney were prepared to offer the Taj $50m in tax breaks if Icahn can make peace with the union. This marks a turnaround for Sweeney, who in late October insisted that a state bailout wasn’t in the cards. A Post source said Sweeney’s plan could include allowing the Taj to make pilot payments in lieu of taxes.

On Saturday, the Press of Atlantic City reported Trump Entertainment Resorts CEO Robert Griffin had written a letter to union president Bob McDevitt saying full health benefits would be restored for at least two years. Griffin also said progress had been made on achieving property tax relief and “other incentives.”

The latest discussions between the parties apparently came after the judge overseeing the Chapter 11 bankruptcy proceedings threatened to convert the process to a Chapter 7 liquidation. The Taj was scheduled to become the fifth AC casino to shut its doors this year, following in the wake of the Atlantic Club, the Trump Plaza, the Showboat and Revel.

Meanwhile, a meeting has been scheduled on Monday to attempt to save the fragile deal to rescue Revel. This week saw Brookfield Asset Management announce it was walking away from its $110m deal to purchase Revel, apparently over Brookfield’s inability to convince ACR Entergy Partners, the power plant that supplies Revel with juice, to reduce its $3m monthly fee. ACR’s deal with Revel – its sole customer – includes monthly charges of $1.7m intended to allow it to recoup construction costs.

Revel’s attorneys have scheduled a meeting on Monday in New York to attempt to revive the deal, although there’s no guarantee Brookfield will attend. Brookfield was absent from a New Jersey bankruptcy court hearing on Friday but an ACR attorney said the company had been “engaging and pushing and trying to find a common ground” with Brookfield.

But Glenn Straub, the Florida developer whose rival bid for Revel went down to defeat, says Brookfield isn’t serious about walking away from Revel. Straub’s attorney Stuart Moskovitz told the Philadelphia Business Journal that Brookfield had yet to file paperwork to support its public claim of washing its hands of Revel. Moskovitz belives Brookfield is simply playing hardball in its negotiations with ACR and that “the press is running with the story Brookfield wanted. They want [ACR] to think they’re backing out.”

Straub, who has filed a legal challenge of the Revel auction process, has publicly stated that he remains interested in acquiring Revel, although his plans for the property apparently don’t include gaming. Brookfield, which operates the Hard Rock in Las Vegas and the Atlantis Paradise in the Bahamas, had originally promised to make $200m of renovations to Revel before reopening the facility as a casino.


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