Icahn Saves Trump’s Taj Mahal Casino, Or Has He?

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There are a number of news sources calling it a done deal but other reports disagree.

Newspapers up and down the Atlantic were reporting that Carl Icahn had saved the Taj Mahal Casino late last night. Those reports have proven to be quite premature, but it does appear that the casino, at least for now, will keep its doors open.

Atlantic City’s second-largest casino with roughly 3,000 employees will not be closing on Saturday as planned, averted and now up in the air though Saturday will see the hotel-casino remain open for the time being.

Icahn is expected to exchange his debt plus $100 million in cash, which is needed to operate the casino, for ownership of the Taj Mahal, according to sources close to the deal. In theory, that will see state Senate President Stephen Sweeney propose legislation that will give the Taj roughly $150 million in tax breaks, sources said.

Union problems and statement

The real contentious issue to this point has been with Icahn and the union that represents roughly 1,100 casino workers, UNITE HERE Local 54.

Earlier today union president Bob McDevitt accused Icahn of reneging on Wednesday’s agreement,  “We thought that we had come to an agreement with all parties that would resolve all of the issues with the Taj Mahal. We signed it, and the Trump CEO signed as well.”

“At noon today [Thursday] , we were told that Carl Icahn had gone back on his commitment and would not enter into the agreement,” McDevitt said. “This is what we have been dealing with for some time now at this property. We are disappointed that Mr. Icahn’s whims are going to add to the feelings of uncertainty and instability that the workers have had to live with and have to endure during this holiday season and beyond.”

Icahn responds

Icahn quickly responded to that accusation this afternoon by posting a letter he had written to Bob Griffin, Chief Executive Officer Trump Entertainment Resorts, Inc., on his website Shareholders’ Square Table.

While for the most part quite polite, Icahn wasn’t without criticism to accompany his promise of an additional $20 million in operating capital and unwillingness to see 3,000 people lose their job this weekend. The most choice words follow:

Trump Entertainment Resorts, Inc. is one of the most distressed companies I have ever come across in my 50+ years of investing.  The company’s hometown of Atlantic City is in the midst of an unprecedented crisis.  Intense competition from surrounding markets is steadily eroding gaming revenues for the city’s casinos. [F]our local casinos shuttered in 2014, and a once vibrant Atlantic City institution, your Taj Mahal, loses almost $10 million every month.

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