After a turbulent couple of years, the Trump Taj Mahal, one of the best known casinos in the world, closed its doors on Monday.
Once the crown jewel of Atlantic City’s casinos, The Taj has fallen into a dismal state of disrepair that resulted in the casino declaring bankruptcy and nearly closing its doors back in late 2014. That was the fourth time The Taj found itself in bankruptcy court in its quarter century existence on the Boardwalk.
But it wasn’t the bankruptcy that caused The Taj to lock its doors on Columbus Day. It was a labor dispute.
Icahn throws the casino a lifeline
After its last bankruptcy filing, The Taj looked like it would be the fifth Atlantic City casino casualty in less than 12 months, until one of the casinos biggest creditors, Carl Icahn, stepped in with a plan to rescue the property.
With Icahn at the helm, many people expected The Taj to turn things around, considering Icahn had performed a similar feat in the recent past. Icahn purchased Tropicana in 2010 and turned that casino around in short order.
Icahn had big plans for the property when he rescued The Taj from bankruptcy earlier this year, reportedly ready to spend $100 million rehabbing the downtrodden casino and hotel, including an initial 10-figure investment just to get the property back to working order.
But Icahn’s investment came with qualifiers. The North Jersey casino referendum would need to be voted down, and the casino’s workers would need to renegotiate their current labor deal in order for Icahn to feel comfortable making such a large capital investment.
When he was unable to reach an agreement with the casino’s striking union workers on a new labor agreement, he was forced to pull the plug on The Taj. The strike began on July 1 and lasted more than a month before Icahn threw in the towel, unwilling to put any more money into the reclamation project.
What happens next
The future of the property is anybody’s guess.
The property is still owned by Icahn (who has said The Taj will be a $100 million hit on his balance sheet) and the mogul is also still in possession of the casino’s gambling license. Theoretically, he could reopen the property in the coming months, with a new, perhaps non-unionized, workforce.
According to NJ Division of Gaming Enforcement spokeswoman Kerry Langan, there isn’t a deadline to turn in a gambling license, and Icahn doesn’t have to surrender the license until the DGE makes a formal request. That’s a process Langan told the AP’s Wayne Parry could take months.
This means there is more than enough time for Icahn to overhaul the property and reopen it.
New Jersey Senate President Steve Sweeney is trying to prevent this from happening, referring to the idea as an unanticipated loophole that would allow a casino owner to tear up a labor agreement. Sweeney and some of his legislative colleagues are trying to close this loophole.
Sweeney told the AP that casinos “shouldn’t be able to misuse bankruptcy laws and gaming regulations in order to warehouse a license or take money out of the pockets of casino workers and strip them of benefits simply because they refuse to come to a labor agreement with their employees.”
littleny / Shutterstock.com