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Trump casinos seek judge OK to end union contract

October 14, 2014

WILMINGTON, Delaware (AP) — The parent company of Atlantic City’s Trump Taj Mahal is asking a bankruptcy court judge to let it terminate its union contract, likening the struggling casino to a critically ill patient whose time is fast running out.

“We have a patient on the table in critical condition and a room full of doctors all staring at each other,” said Kris Hansen, a lawyer for Trump Entertainment Resorts. “No one wants to touch the patient, and the patient dies from inaction.”

The company says it needs immediate relief from pension and health insurance costs in order to keep the casino open past mid-November. A judge in Delaware began hearing the request Tuesday morning.

Hansen said Local 54 of the Unite-HERE union has dragged its feet in negotiations, and fears concessions it makes would be sought by other casinos. He accused the union of being “hell-bent on shutting the Taj Mahal down” rather than agree to givebacks that would then apply to other casinos under a longstanding clause in the union contract.

“They were throwing up a lot of roadblocks — figuratively and literally,” said Craig Keyser, the company’s lead negotiator, referring to an incident last Wednesday in which the union sat down in the Atlantic City Expressway and blocked traffic to protest the company’s demand for givebacks.

A union lawyer declined to immediately respond in court.

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. It is seeking to have Atlantic City lower its property tax assessments by nearly 80 percent, to have the state contribute $25 million in tax credits, and for union workers to give up their pension and health insurance. If all those concessions are made, billionaire investor Carl Icahn would pump $100 million into the casino and become its owner. Icahn, who also owns the Tropicana Casino and Resort, owns Trump Entertainment’s roughly $285 million in debt.

If the judge rules against the company, it could decide fairly quickly to shut down the Taj Mahal, its lone remaining casino. It would become the fifth of Atlantic City’s 12 casinos to close this year.

Hansen said the casino was supposed to let the New Jersey Division of Gaming Enforcement know by Monday whether it planned to shut the Taj Mahal on Nov. 13. He said the casino wanted to wait for the judge’s ruling on terminating the union contract, which was expected to be issued later in the day Tuesday.

The company’s proposed reorganization hinges on its lender, Icahn, pumping new money into the casino, which he would then own.

In a court filing last week, Local 54 offered to accept reduced pension contributions, but would not agree to any efforts to end them. The union also wants the eventual owner of Trump Entertainment to be bound by its union contract.

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Wayne Parry can be reached at http://twitter.com/WayneParryAC

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