Atlantic City’s troubled Trump Taj Mahal casino appears to have been pulled back from the brink after receiving a $20m lifeline from its principal creditor. The bankrupt property appeared set to close as scheduled on Dec. 20 after the casino’s unionized workers refused to drop their appeal of a court order voiding their health and pension deals.
Billionaire investor Carl Icahn, who holds most of the Taj’s debts, has vowed to inject $100m into the bankrupt casino but only on the condition that workers surrender certain benefits and that the city and the state ante up some corporate welfare. The refusal by Local 54 of Unite-HERE execs to drop their appeal of the court order by Icahn’s Monday deadline had been seen as a deal breaker.
Early on Thursday, the New York Post reported that the union had reached a deal with Trump Entertainment Resorts that would have restored the union’s health and benefit schemes. A few hours later, Local 54 president Bob McDevitt said the deal had fallen apart after Icahn had second thoughts.
Shortly thereafter, Icahn released a letter he’d written to Trump Entertainment CEO Robert Griffin, in which Icahn pledged to provide $20m of additional financing that would allow the casino to remain open while negotiations with the union continued. Icahn said he was doing this “even though I have no assurance that the state will provide aid or that the union will drop its appeal.”
Icahn pledged to work with the union, the state and the city “to forge a global settlement that will bring real stability to the Taj and its employees.” Icahn said others would argue that he’d be better off letting the Taj fail but he “cannot be so callous as to let 3,000 hardworking people lose their jobs” while a deal was still possible. Icahn insisted he wasn’t “anti-union” despite “some questionable decision-making from this union’s leadership.”
Icahn described Trump Entertainment as “one of the most distressed companies I have ever come across in my 50+ years of investing.” Icahn noted that the property loses nearly $10m every month thanks to AC being “in the midst of an unprecedented crisis.”
Had the Taj closed as planned, it would have been the fifth such closure AC has witnessed this year, which has thrown some 8k employees out of work. The city’s annual gaming revenue is expected to fall this year to a level roughly half its $5.2b peak recorded in 2006, right before regional competition from Pennsylvania and other neighboring states began drinking AC’s milkshake.