The most recognized name in Atlantic City will continue to have a prescience there, albeit in a reduced capacity. ABC News announced on Monday that Carl Icahn has reached an agreement with Donald Trump to keep his name attached to the bankrupt Trump Taj Mahal. The Taj is the last casino in Atlantic City still bearing the Trump name.
Trump and his daughter Ivanka had been in the middle of a lawsuit against Trump Entertainment to remove the name from the struggling casino. Trump Entertainment removed the name from the Trump Plaza soon after the lawsuit was filed but the Trumps were looking to have the name removed from the Taj because they claimed that their reputation was being harmed due to the current state of the properties.
Trump’s Respect for Icahn Helped Broker the Deal
The deal struck by Icahn will assure that the Trump name will remain attached to the Taj. As part of the deal, all traces of the Trump name must be removed from the TrumpPlaza. All signage has been removed, however outlines of the name can still be seen where the signs used to hang.
Donald Trump issued a statement in connection with the agreement and said that Icahn was a man that he greatly respects both personally and professionally. He stated, “The Trump Taj Mahal, under the right leadership and with the proposed significant reinvestment in the property, can be, once again, a wonderful place for travel and entertainment.
Icahn stated that he hopes to restore the Taj to its former glory and the company called the Trump name “an invaluable asset and point of differentiation of the company.” Trump has a vested interest in the Taj succeeding as he holds a 10% stake in the company. A bankruptcy judge must still approve this deal, but there is little reason for him to deny this deal as it has long-term benefits to the company.
Union Contract Remains Only Real Hurdle for Casino to Overcome
At present, the only real hurdle to Icahn completing the acquisition of the Taj is the union contract. A federal bankruptcy judge agreed to terminate the contract last year but the union has since appealed. Icahn is looking to eliminate pension and health care in order to save approximately $14 million a year for the casino.
The Local 54 of Unite Here and Trump Entertainment have been in negotiations at several points since the contract was nullified but a deal was never reached. Icahn reportedly nixed a deal back in December that would have restored union health care and partial pensions. After agreeing to extend financing to the casino, Icahn looks willing to wait out the appeal process.
Once the union matter is resolved, Icahn can proceed with his plan of converting debt into equity and becoming the new owner. He is the primary debt holder and is reportedly looking to spend $100 million in renovating the casino. Trump Entertainment also recently resolved disputes with the creditors committee over the company’s restructuring plan, meaning that once the union matter is resolved, there should be little to stop the company from coming out of bankruptcy.