A chance Carl Icahn may reopen the Trump Taj Mahal

- Billionaire Carl Icahn's Atlantic City management team is holding out the possibility of reopening the shuttered Trump Taj Mahal casino.

The New Jersey Legislature is to vote Thursday on a bill that would effectively punish Icahn for shutting down the Taj Mahal on Oct. 10, stripping him of a casino license for the property for five years.
 
Tony Rodio, who ran the Taj Mahal for Icahn, tells The Associated Press the proposed bill would prevent the company from reopening the casino and restoring lost jobs.
 
Many union workers say they suspect the company will try to reopen the Taj Mahal in the spring as a non-union facility following a 102-day strike by Local 54 of the Unite-HERE union that lasted until the casino's final day.
 

Trump Entertainment Resorts put out this statement concerning the legislation:

Senate Bill 2575, proposed by Senate President Steve Sweeney and listed for the Senate voting session scheduled for October 20 is a seriously misguided attempt by some members of the NJ legislative leadership to insert itself into the collective bargaining process -- one that will have a chilling effect on the casino investment in Atlantic City in the years to come and certainly result in the inability of certain closed casinos, including the Taj Mahal, to reopen and reemploy thousands of laid-off workers to the detriment of Atlantic City and the State. In short this is an anti-job, anti-growth piece of legislation that has been introduced by Senate President Sweeney for the sole purpose of currying favor with Atlantic City union leaders.

S2575 would amend Section 86 of the NJ Casino Control Act, NJSA 5:12-86, to revoke the existing casino license of a casino that closes on or after January 1, 2016, and further disqualify the casino license holder from subsequent licensure to reopen the casino (or any other NJ casino) for a period of 5 years. It therefore penalizes the casino license holder and its’ Board of Directors from making sound business decisions in the exercise of their fiduciary obligations, and effectively places significant barriers to reopening or selling the casino, as well as reemploying thousands of employees. 

Section 86 of the NJ Casino Control Act was originally enacted in 1977 and has been employed for almost 40 years to bar criminals and other wrong doers from obtaining or holding a casino license and being involved in the casino industry. By amending Section 86 to also disqualify select business owners who have decided to close their operations because the business is unprofitable, effectively places business prerogative in the category of wrong doing and punishes the business, its shareholders and ultimately its employees. Instead of protecting the integrity of the casino licensing process, Senate President Sweeney is attempting to hijack the NJ Casino Control Act in an obvious and petty attempt to use his legislative power to inflict “punishment” on the one casino owner he deems in need of punishment.

Under the proposed legislation, if the closure is because of a labor dispute and the labor dispute is resolved through a mutually-acceptable agreement, the disqualification provision is removed. By giving the labor union undue leverage in the collective bargaining process demonstrates conclusively that this is an attempt to legislate collective bargaining results by threatening casino disqualification. It also makes no sense to allow a labor resolution exception and not allow other exceptions such as a new marketing plan, new sources of capital or any and all other business changes that would turn an unprofitable business into a profitable one. This type of interference is unprecedented, and combined with the retroactive effect of the legislation, unconstitutional.

By making the law retroactive to January 1, 2016 it would only apply to the Taj Mahal and any future casino closure and would not apply to the Showboat, Claridge, Atlantic Club and Revel and their prior ownership groups, including Caesars Entertainment. It is therefore designed specifically to insert the State of New Jersey into the Taj Mahal-UNITE HERE Local 54 collective bargaining process by taking the side of labor and punishing management and its ownership. Its proposed retroactive application to some, but not all businesses and their owners who have had to close casinos is at best inequitable and likely unlawful.

“The sole purpose of S2575 is a blatant attempt by Senate President Sweeney to show the unions that he is their number one supporter despite that fact that the Taj closed because it had no path to profitability, was losing millions, and couldn’t reach a deal with Local 54 even after management was led to believe a deal had been reached.  Sweeney is obviously using his position as Senate President to punish Carl Icahn because the Board of Directors of Trump Entertainment Resorts, after investing and losing over $250 million in an attempt to save the Taj Mahal and its 3,000 jobs, closed the Taj to stem the continuing loses brought on by the UNITE HERE Local 54 strike. It is also important to remember that Carl Icahn saved the Tropicana when it was in bankruptcy and has led one of Atlantic City’s few recent success stories at that property,” said Tony Rodio, President and Chief Executive Officer of the Taj’s management company, Tropicana Entertainment. “Punishing Mr. Icahn by revoking his ability to reopen the Taj or making further investments in Atlantic City for 5 years as well as restricting his ability to sell the Taj is unconscionable especially in light of his record in saving the Tropicana.  It is particularly ill-advised because with this legislation Carl Icahn’s ability to further invest in Atlantic City has been constrained and the possibility of creating additional jobs (as he did at the Tropicana) has been seriously limited,” said Rodio. “I don’t see any reason for anyone to want to invest in the casino industry in Atlantic City given this adversarial investment climate being created by some leaders of our State Legislature, the same ones who are supporting the North Jersey gaming referendum that will certainly result in the closure of many more Atlantic City casinos and future disqualification of their present owners under this bad legislation.  It also raises serious questions why anyone would want to invest in the State of New Jersey at all if the State legislature moves forward with this business, job and growth killing legislation,” said Rodio.

 

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