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Revel Lien Fails to Draw Bids; Taj Issues Ultimatum to Union

Tax Liens for three Atlantic City casinos went up for auction on Thursday, but only two were picked up. Revel’s $32 million tax lien failed to receive a single bid, while the Trump liens sold to a firm that is in the middle of a legal dispute with Trump Entertainment.

Also, Trump Entertainment has issued an ultimatum to the union in an attempt to force their hand. The Taj plans to close their doors on December 20, but has been working desperately with the union to avoid closure. Finally, the liquidation hearing for Trump Entertainment has been delayed until two days after the casino is scheduled to close.

Taj and Plaza Tax Bills Sold – Revel Bill Retained by the City

Atlantic City auctioned off 1,100 tax debts on Thursday, but the three garnering the most attention were the debts for the Trump Plaza, Trump Taj Mahal and Revel casinos. Tax liens for the Trump properties totaled $22 million and Revel had $32 million in tax lien debt placed for auction.

Interested companies compete against each other by offering lower interest rates on the property. Starting at 18%, companies move down incrementally until a single bidder remains. The winning bidder then pays the taxes on the property and then works to recoup those funds plus the negotiated interest rate. If the bills are not paid at the end of two years, the buyer can foreclose on the property.

Levine Staller attorney Michael Sklar placed the only bid for the Trump Properties. He opened the bidding at 0% and stunned those in attendance. Some questioned his motives and even for which client he represented. The purchase is also intriguing considering that Levine Staller formerly represented Trump Entertainment and is still involved in a legal dispute with the company over unpaid fees.

Just when you thought news for Revel couldn’t get worse, the tax lien failed to sell on Thursday. The call for the sale was primarily met with groans from attending bidders and eventually the lien was retained by the city for 18% interest. This now means that the city will have to continue pursuing taxes from the defunct property, a prospect that has become more and more unlikely due to the continuing issues surrounding the casino’s sale.

Taj Give Union Monday Deadline to Drop Appeal

According to MyCentralJersey.com, the Local 54 of Unite-HERE is facing an ultimatum from the Taj – drop the appeal or the casino will close. In a letter sent from Trump Entertainment on Thursday, CEO Bob Griffin gave the union until 5 p.m. on Monday to drop their appeal of the cost reduction package approved in bankruptcy court.

According to Griffin, “Two days ago, we actually thought we had reached a deal with you and the state. Every one of your demands was met, and Mr. Icahn, believing that you and the state supported the deal, even delivered his executed signature page. But even though that deal would have kept the Taj open, restored the union health care, restored the union work rules and established a new pension fund, you still didn’t sign.”

Griffin continued and pleaded for the union to act, stating that time was running short and money was running out. Should the union drop its appeal, it is likely that the casino will stay open after recent Senate bills were introduced to help reduce the tax burden placed on Atlantic City casinos. Primary debt holder Carl Icahn plans to convert debt into equity, take over as the casino’s primary owner, and use $100 million of his own money to improve the property.

Taj Liquidation Hearing Postponed Until December 22

On Wednesday, U.S. Bankruptcy Judge Kevin Gross once again delayed the liquidation hearing for Trump Entertainment. The new hearing is now December 22, two days after the casino is scheduled to close. This new date has raised speculation by some as to whether the casino will stay open.

The most obvious speculation is that the court expects the Taj to seal a last-minute deal and keep the casino open. In such a case, the company would continue in Chapter 11 and work toward an eventual emergence from bankruptcy. Granted, if the Taj fails to keep their doors open, this case will be a mere formality and the company will go into Chapter 7 liquidation.

 

 

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James Guill

James Guill began his poker career in 2006, spending two years traveling the US tournament circuit. Since 2008, he has covered the game extensively for some of the biggest names in the industry. When not writing about the latest poker news, he can be found hunting for antique treasures in Central Virginia.

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