Crucial ruling due on Taj Mahal casino's future
ATLANTIC CITY, N.J. - A federal bankruptcy court judge was expected to issue what the owners of Atlantic City's Trump Taj Mahal Casino Resort consider a life-or-death decision for the financially-troubled gambling hall.
Trump Entertainment Resorts and billionaire investor Carl Icahn want the judge to cancel the casino's union contract, saying it can't survive without shedding costly pension and health care obligations.
Allan Brilliant, a lawyer for Icahn, told U.S. Bankruptcy Judge Kevin Gross on Tuesday that Trump Entertainment needs the financial relief that breaking the union contract would provide.
Trump Entertainment has threatened to close the casino by Nov. 13 if it cannot shed its pension and health care obligations to the Taj Mahal's 3,000 workers.
Gross was to issue his decision at 3 p.m. Friday.
"If you don't grant the ... motion, it's just not viable as a business," Brilliant said Tuesday. "Ultimately very quickly the casino will close. This is the window here; the window is open."
Icahn, who owns the Taj Mahal's $286 million in debt, would swap that debt for ownership of the casino, and invest $100 million into it. But that investment is contingent on massive government aid from Atlantic City and the state.
The company says it needs big union concessions and massive tax breaks from Atlantic City and New Jersey -- both of which already have rejected the demand. It originally sought to have Atlantic City lower its property tax assessments by nearly 80 percent, to have the state contribute $25 million in tax credits, and for union workers to give up their pension and health insurance. It would provide $2,000 stipends for workers to find their own coverage under the Affordable Care Act.
After getting a negative reaction from Atlantic City Mayor Don Guardian and state Senate President Steve Sweeney, the company revised its financial request from the state. It is now seeking $175 million in relief through a so-called PILOT program-- payments in lieu of taxes -- and the receipt of two types of state economic grants not usually available to casinos: the Economic Redevelopment Grant and the Urban Revitalization Grant. State legislators would have to vote on letting the casinos into the program.
The Taj Mahal would be the fifth of Atlantic City's 12 casinos to close this year. Its lawyers said the casino's financial situation is so dire that it has been selling used mattresses and televisions from the closed Trump Plaza casino to generate extra cash.
Donald Trump owns a 10 percent stake in Trump Entertainment but no longer controls it. He is suing the company to remove his name from the property, which he says has fallen into disrepair and does not meet agreed-upon standards of quality and luxury.
Last week, workers removed the Trump name from the shuttered Trump Plaza casino.