Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Icahn: Trump Taj Mahal "Will Almost Certainly Close"
Author: Joel R. Glucksman
Date: November 13, 2014
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B64 at English Wikipedia [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0) or GFDL , via Wikimedia Commons from Wikimedia CommonsBillionaire investor Carl Icahn, the so-called ‘father’ of the leveraged buyout, appears to be weary of his investment in the Trump Taj Mahal.
The potential buyer for the Taj Mahal told The Associated Press that the casino “will almost certainly close.” He explained that he will still go through with the deal to swap his almost $300 million of debt for ownership of the casino – contingent on investing a further $100 million – but wishes that he hadn’t picked up the phone when the Taj Mahal’s current owner had called.
“One overriding fact is perfectly clear: The Taj is quickly running out of money and will almost certainly close,” Icahn told the AP. “Reprehensibly, the union, instead of working with, and trying to help, the company to keep the Taj alive, is instead doing everything to destroy the possibility of saving the jobs of over 3,000 employees.”
A U.S. bankruptcy judge ruled recently that the casino may jettison its traditional defined benefit pension plan and company-sponsored health insurance, according to The Inquirer. Trump Entertainment, the company that owns the Taj Mahal, told Judge Kevin Gross that it needed to save $14.6 million annually from its contract with the union that represents most of its workers UNITE HERE Local 54.
In response, about 500 union members came out to protest on Oct. 24, demanding that their health care be restored, NBC reported. The demonstrators allowed traffic through to the casino, and Trump Entertainment CEO Robert Griffin said that they were having no effect on business inside the Taj Mahal.
The casino’s plan for restructuring also includes an aid package of $175 million from the state, the news source explained. This request is extremely unpopular among state legislature and has already been rejected by state Senate President Steve Sweeney.
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