Taj Mahal Closure - Cancellation of Employees Pension and Healthcare
Alan Brilliant, the lawyer representing Carl Icahn, the billionaire owner of the Trump Taj Mahal, has told the judge presiding over the casinos bankruptcy hearings, that the casino will be forced to close down on the 13th of November if the judge Kevin Gross refuses to allow for the cancellation of its union contract.
Alan Brilliant has informed US Bankruptcy Judge, Kevin Gross, that the Taj Mahal – run by Trump Entertainment Resorts – will need the financial relief that breaking the union contract for the pension and healthcare of its 3000 workers will provide.
Should the judge rule that the corporation would need to keep abide by the stipulations in the union contract, it would need to close as it could not afford to keep the casino open and running as well as maintain its obligations for the pension and healthcare of its employees.
“If you don’t grant the motion [to dismiss the pension obligations], it’s just not viable as a business” Brilliant said in a statement to the judge. “Without that, staying in the pension plan, ultimately very quickly the casino will close. The window is here; the window is open” he said.
Billionaire Carl Icahn, who owns the Taj Mahal’s debt, $286 million, would exchange the debt for full ownership of the casino. He has also said the he will invest $100 million into the casino but the investment would be contingent on government aid from the Atlantic City and the state of New Jersey.
Kris Hansen, a lawyer for the Trump Entertainment, the Taj Mahal’s holding company, stated a similar argument during the casinos bankruptcy hearings.
“If you do grant it [permission to break the union contract], we have a chance to stay alive” Hansen said during his court appearance. “The cost structure of this casino doesn’t work, and it needs to be fixed. If we’re successful, employees get to keep their jobs, even though they made some concessions”.
Trump Entertainment have said that big union concession as well as massive tax breaks from both Atlantic City and New Jersey would be needed, but both demands made by the group have been rejected by Atlantic City and the state.
After Mayor Don Guardian reacted negatively to the demands by Trump Entertainment, the company was forced to revise its financial request from the state. The new requests include: $175 million in relief through a PILOT program which involves payments made to the state in lieu of taxes as well as the receipt of two state economic grants – the Economic Redevelopment Grant and the Urban Revitalization Grant – that would not usually be available to casinos.
But, the proposals set forward by the casino, could have consequences for the staff as was shown by William Josem, a representative for Local 54 of the Unite-HERE. He showed how several of Trump Entertainments proposals could lower the wages of the workers that earn $12.42 an hour.
If no concessions or agreements can be made between the casino, the unions or, for that matter, the bankruptcy judge, the Taj Mahal could well be the fifth Atlantic City casino to close this year. The company was supposed to inform state regulators by Monday the 13th if they were going to close, but they have received an extension until October the 20th to see what the judge decides.
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