A bankruptcy court ruling allowing Atlantic City’s Taj Mahal casino to break its union contract may have only bought the casino a little more than two weeks of life.
Trump Entertainment Resorts—which own the casino—has been seeking both union concessions and $175 million in state aid and tax cuts for a plan to save the troubled casino. They had planned to close the casino November 13 unless they got all the concessions.
Even with the union contract broken, the casino may still close on December 1 if denied the state aid and tax cuts, casino officials said in a letter to workers.
Trump Entertainment sought to break its union contract and stop pension plan payments and healthcare to about 1,100 union workers to save $14.6 million annually and keep the property open past November 13. After a U.S. bankruptcy judge ruled in favor of breaking the contract, the company promised to keep the casino open through November.
But that may be it if the state does not come through with an asked for about $175 million in funds and the city and state don’t severally reduce the casino’s tax assessments, casino official’s said.
Both state and city officials have said they will not give the company the state aid or reassess its taxes.
In a letter to workers, the company said, “Cash is tight and time is short” for the company and urged workers to contact state lawmakers to “urge them to help save the Taj Mahal by providing the necessary governmental financial assistance we need to save your jobs.”
As if to back up the point, the company has asked the bankruptcy court for permission to sell the last 353 of its former Trump Plaza slot machines to Patriot Gaming & Electronics, a New Jersey firm that sells new and used slot machines and parts. The machines would be sold for just under $150,000. Trump Plaza closed in September.
The letter also faulted the city’s main casino workers union—Local 54 of UNITE HERE—for continuing to fight management and picketing the casino last month after the labor contract was voided.
Trump Entertainment is trying to implement a plan where billionaire Carl Icahn—who owns about $286 million of the casino’s debt—would step in and take over the company and invest $100 million in the property. Icahn has also wanted the union concessions, the state assistance and the tax cuts before moving on the plan.
That has put Icahn at odds with state officials such as state Senate President Stephen Sweeney who have charged him with trying to gut benefits for casino workers, including workers at his Tropicana Casino resort. Casino workers have directed much of their anger at Icahn as well, saying his plan will adversely affect thousands of workers.
Sweeney, a union official himself, has said he will oppose any state aid for the casino.
Icahn has been quoted as saying he expects the Taj Mahal to close as it is running out of money. Though he said he will live up to his part of the deal—provided he gets the concessions—he now says he is sorry he ever got involved with the casino.
Sources tell GGB that Icahn doesn’t communicate directly with them, so Taj executives have no idea what to expect from him.
There was some good news for workers as Local 54 announced that their health care fund would continue to provide health benefits to Taj workers through the end of the year.
Trump Entertainment wants to provide workers with a $2,000 stipend to help them obtain health insurance through the federal Affordable Healthcare Act. The workers were scheduled to lose their current insurance at the end of October before the two-month extension.
Also, a community group of local churches called Together AC has begun collecting money to help the city’s laid-off casino workers. More than 8,000 jobs have been lost in the city as four casinos have closed this year.
Funds raised will be distributed by the Atlantic City Long Term Recovery Group through a screening process to starting January 1. The group has handled Atlantic City’s relief efforts in the wake of Hurricane Sandy.
