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July 25, 2016

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Court: Taj Mahal casino rightly ended worker benefits

Image

Wayne Parry / AP

This Oct. 24, 2014, photo shows the Trump Taj Mahal Casino Resort in Atlantic City N.J.

ATLANTIC CITY, N.J. — An appeals court ruled Friday that Atlantic City's Trump Taj Mahal casino was within its rights to end health insurance and pension benefits to its workers, removing the last major obstacle to billionaire Carl Icahn taking over.

The court ruled in favor of the casino's parent company, Trump Entertainment Resorts, which ended benefits in October 2014 as part of its bankruptcy filing. The company said it could no longer afford the benefits and gave workers stipends to find insurance on the open market, including under the federal Affordable Care Act.

Icahn is acquiring the casino from bankruptcy court and has been keeping it afloat financially for more than a year. He had threatened to cut off funding if the court ruling went against him, which would have forced the Taj Mahal to close.

Local 54 of the Unite-HERE casino workers union appealed the ruling, arguing that a bankruptcy court judge did not have jurisdiction over whether the company could end worker benefits. The union maintained that right belonged to the National Labor Relations Board. But, the appeals court sided with the company.

Union President Bob McDevitt said Local 54 is weighing its next step, including a legal challenge. It has previously authorized a strike against the casino, though it has not yet called one.

"The Taj Mahal will never turn around and be successful without the full participation and involvement of its workers," he said. "That won't happen while people have to worry about their future."

Icahn and Trump Entertainment had no immediate comment on the ruling.

The ruling clears the way for Icahn to take over the casino and carry out his stated plan to invest millions of dollars into it.

It also removes a giant cloud of uncertainty that had been hovering over the casino since it filed for Chapter 11 bankruptcy protection in September 2014. The company had threatened repeatedly to close the Taj Mahal and had set several closing dates that came and went.

Icahn also owns Atlantic City's Tropicana casino.

Donald Trump, the real estate mogul and Republican presidential candidate who founded Trump Entertainment, no longer owns or controls the company.

The Taj Mahal is now the company's lone casino. It previously sold Trump Marina (now the Golden Nugget), and closed Trump Plaza.

The union has staged numerous protests against the Taj Mahal and Icahn, even as it tried to reach a negotiated contract settlement with the billionaire.

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