Atlantic City’s Taj Mahal casino continued to slide towards a possible December 12 closing as Trump Entertainment warned its union workers to either drop an appeal of a court ruling ending their union contract or face losing their jobs.
Trump Entertainment described itself as “a very sick patient lying on his death bed,” in a letter to workers.
CEO Robert Griffin told the Associated Press that the company has notified the New Jersey Division of Gaming Enforcement of the possible December 12 shutdown date.
The notice to the DGE followed the letter sent to employees.
Trump Entertainment Resorts last month won a decision in bankruptcy court allowing it to stop pension and health benefit payments to union workers. The casino employs about 3,000 workers, but only about 1,100 are part of Local 54 of the Unite-HERE union, the city’s largest casino union.
The company said it needed the savings to keep the cash-strapped casino operating. The union, however, quickly appealed the ruling.
In the letter, the company said relief from health insurance and pension costs is essential to keeping the casino open calling its request to the union to drop the appeal a “last ditch” effort to survive.
“Our company is unfortunately hanging on by the skin of its teeth,” company CEO Robert Griffin wrote to Taj Mahal employees. “We are quickly running out of money and will be forced to notify the gaming regulators that we will be closed within a month unless our problems are quickly resolved. Your company is like a very sick patient lying on his death bed, and his partner the union, who is supposed to help, is instead hitting him over the head with a hammer.”
Union officials told the Associated Press they would consider any proposal from the company that would protect workers. But they also continued their criticism of billionaire Carl Icahn, who is the main debt holder for the casino.
“Carl Icahn has jacked the interest rate up on the Trump loans from 6.2 percent to 12 percent, ripped $350 million out of this company in four years, and now he says workers can’t have health care, pensions, paid breaks and many other things that other Atlantic City casino workers enjoy,” union President Bob McDevitt said.
The comments came before the December 12 closing date was announced.
Icahn owns $286 million of Trump Entertainment’s current debt and is part of a plan by the company to save the casino. Icahn would trade much of the debt for ownership of the property and then invest another $100 million into it.
But Icahn also wanted the union concessions as well as tax breaks and about $175 million in state development aid to make the deal—a prospect that is beginning to seem more and more remote as state and city officials have said they will not approve state aid or tax cuts.
In fact, Atlantic City has asked the bankruptcy judge in the case to expedite its collection of about $22 million in unpaid taxes from the closed Trump Plaza casino. The city wants to include the unpaid tax bill in a planned December tax-certificate sale along with about $32 million in unpaid taxes it says is owed by the also-closed Revel casino. Only Trump Plaza is owned by Trump Entertainment.
Icahn posted a message on his blog early last week saying the Trump Entertainment letter to employees “sums it all up.”
