Billionaire Carl Icahn is considering spending USD 100 million to save the Trump Taj Mahal casino from closing.
But the offer comes with considerable strings attached: Icahn is willing to consider the bailout "if and only if" he gets big givebacks from the casino workers' union, steep tax breaks from Atlantic City and county, and USD 25 million in funds from a New Jersey agency, according to his attorney.
In a filing to a bankruptcy court, the Taj Mahal's parent company, Trump Entertainment Resorts, presented a letter from Icahn's attorney saying the billionaire would consider bailing out the casino if the debt he owns in it were converted to equity that would give him ownership.
Icahn, who bought Atlantic City's Tropicana in 2010 in a similar manner, wants the city to drastically reduce the Taj's taxes, the union to give up pension and health insurance, and a state redevelopment agency to provide the USD 25 million.
"Notwithstanding the fact that putting more money into the Taj is a questionable business decision, we share the company's desire to see the Taj Mahal remain open and preserve the jobs of the company's employees," Icahn attorney Allan Brilliant wrote in a September 23 letter to Trump Entertainment Resorts in response to the company's offer to hand ownership to Icahn.
Failing to get the concessions "would make it impossible to operate a viable company at this time."
The court filing made Friday paints a dismal portrait of the Taj Mahal's finances, and holds out no hope of its survival beyond November without Icahn's money and the related concessions. Trump Entertainment has threatened to close the casino on November 13 and lay off its 2,041 full-time and 825 part-time employees.
It would be the fifth of Atlantic City's 12 casinos to close this year.
The filing claimed that the casino union, Local 54 of Unite-HERE, indicated a willingness to have its members forego participation in its pension plan in favor of a 401(k) plan, but was not willing to jettison health coverage in favor of having workers find their own insurance under the Affordable Care Act, as Trump Entertainment wants them to do.
Union president Bob McDevitt said the proposal would cut total compensation to workers many of whom earn USD 12 an hour by 35 per cent.
