January 17, 2016
The struggling Trump Taj Mahal in Atlantic City can exit bankruptcy and will not have to uphold health and pension benefits promised under union contracts, paving the way for billionaire Carl Icahn to go forward with his plans for reviving the casino, reports the Wall Street Journal.
On Friday, a federal appeals court in Philadelphia upheld a ruling against the union UNITEHERE Local 54, which went on strike in August to protest the loss of benefits.
Icahn agreed to take control of the casino in 2014, loaning the business $292 million. He promised to invest up to $100 million more, but only on the condition that he could cut out union benefits that he considered unsustainably expensive. The battle between Icahn and the unions led to 16 months of legal limbo, and as the Press of Atlantic City pointed out, that uncertainty cast a "shadow" over the future of the resort.
Instead of a health plan, the workers will get a $2,000 health care credit, which Icahn said is fair because "ObamaCare and Medicaid provide health coverage at a fraction of the cost of the coverage provided under the existing UNITEHERE Health plan."
"We have learned in Atlantic City over the years not to rely on the courts for justice, and we have been proven right again," said UNITEHERE president Bob McDevitt in a statement on Facebook. "We have never put all our marbles in a legal strategy, but rather in the men and women who have demonstrated their willingness to stand up and fight for their jobs, families and communities."
He did not say what the union would do in response, but said that it will "evaluate all our options and next steps, including legal ones."
The union has accused Icahn of "profiting from Atlantic City's distress," while Icahn has argued that eliminating costly benefits is the only way to save the Taj Mahal from shutting down entirely, taking 2,600 jobs with it.
"I view it as a difficult decision that was made in order to SAVE YOUR JOBS," he wrote in a letter to the union in June.
Presidential candidate Donald Trump has only a small stake in the casino that bears his name and isn't involved in managing it. However, the two billionaires are on friendly terms: Trump said that he'd consider naming Icahn as Treasury Secretary and Icahn has endorsed him for president.