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Judge Allows Trump Taj Mahal To Void Union Contract

Author: Joel R. Glucksman

Date: October 28, 2014

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The Trump Taj Mahal may be able to keep its doors open after all. In a surprising move, Judge Kevin Gross granted Trump Entertainment Resorts’ request to terminate its contract with Local 54 of the Unite-HERE union, giving Trump a chance to avoid closing its struggling Atlantic City casino, according to The Associated Press. The contract in question pertained to the casino’s pension and health care obligations. Both Trump Entertainment Resorts and billionaire investor Carl Icahn have said that the casino would not be able to survive if it were forced to continue paying these benefits to its employees.

According to the Daily Bankruptcy Review, Icahn plans to move ahead with his plan to take over the struggling casino even if the more than 1,100 workers represented by the union go on strike, his attorney, Allan Brilliant, told the judge in court.

“The decision today will certainly enrage the workers who have relied on and fought for their health care for three decades,” Bob McDevitt, president of Local 54, told The Associated Press. “We intend to continue to fight this both in the courts and in the streets. Tropicana’s major owner [Icahn] wants you to believe that the demand to take away workers’ health insurance is necessary because of the financial situation at the Taj Mahal and in Atlantic City. We believe it has nothing to do with either. He has a long history of eliminating, reducing or freezing worker benefits which sometimes saddles government agencies with the burden of cleaning up the mess.”

Icahn owns Taj Mahal debt of $286 million, which he has agreed to swap for ownership of the casino and invest a further $100 million in making it a success, the news source explained. This investment is contingent, however, upon massive government aid from Atlantic City and New Jersey. It seeks $175 million in relief through a payment in lieu of taxes, or PILOT program, an Economic Redevelopment Grant and an Urban Revitalization Grant.

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