Icahn aide: Taj has to close if union pact remains

Associated Press

WILMINGTON, DEL.

A federal bankruptcy court judge will issue what the owners of Atlantic City’s Trump Taj Mahal Casino Resort consider a life-or-death decision Friday for the 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. As the judge appeared to be making up his mind whether to rule on the question, Brilliant said if the decision went against the company, the business could not survive.

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.

“If you don’t grant the ... motion, it’s just not viable as a business,” Brilliant said. “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.

Kris Hansen, a lawyer for Trump Entertainment, made a similar argument.

“If you do grant it, we have a chance to stay alive,” Hansen said. “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. Having a job is better than not having a job.”

Earlier in the day, he likened the Taj Mahal to a critically ill patient on an operating table with a room full of doctors all looking at each other, with no one doing anything to save the patient.

The company says it needs big union concessions and massive tax breaks from Atlantic City and New Jersey — both of which have already rejected the demand.