Is Carl Icahn a villain or the savior of the Trump Taj Mahal? It depends on whom you ask, but for now, the Taj will stay open for the immediate future following the commitment of $20 million in financing from the billionaire. This funding comes just two days prior to the casino’s scheduled closure.
The financing commitment comes after a deal between Trump Entertainment and the union fell through on Wednesday night. The Press of Atlantic City reported that the union had agreed to the deal, but Icahn pulled out at the last minute. Instead, he will continue to fund the Taj through bankruptcy proceedings and continue to work to keep the casino open.
Icahn Will Not Shy Away from Challenge of Keeping Taj Open
Despite a last minute deal with the union failing on Wednesday, Icahn agreed to provide $20 million in bankruptcy financing for the Taj. This will help keep them open, but a new potential closure date was not set. Icahn sent a formal commitment letter to Trump Entertainment CEO Bob Griffin on Wednesday and explained his position in providing the financing.
He opened by telling Griffin that he does not “typically shy away from a challenge. In fact, I take great pride in my ability to successfully rebuild failing businesses.” He then went on to explain how the Taj is one of the most distressed companies that he has come across in over 50 years of investing. According to Icahn, part of the reason he considered the request was because of “the tremendous integrity” Griffin had displayed throughout the process.
Icahn also reminded Griffin that many have argued that it would be better financially to allow the Taj to close and let someone else deal with the problem. His response to that was that he “cannot be so callous as to let 3,000 hardworking people lose their jobs while a global settlement with the State and Union, which would enable us to turn the Taj around, as we’ve done with so many other failing businesses, remains a possibility.”
Icahn closed the letter stating that he would grant the $20 million in financing and that he will continue to “work collaboratively with the State, the City and the Union to try and forge a global settlement that will bring real stability to the Taj and its employees.”
Union Blames Icahn for Failed Deal
From reports, the Local 54 of UNITE HERE and Trump Entertainment had reached a deal in principle on Wednesday and that both parties had even signed the deal. The only person that would not sign is Icahn. Bob McDevitt, Local 54 president, expressed his frustration on Thursday regarding the failed deal.
We thought that he had come to an agreement with all parties that would resolve all the issues of the Taj Mahal,” McDevitt said. “We signed it, and the Trump CEO signed it as well. At noon today, we were told that Carl Icahn had gone back on his commitment and would not enter the agreement.”
McDevitt continued, “We are disappointed that Mr. Icahn’s whims are going to add the feelings of uncertainty and instability that the workers have had to live with and have to endure during this holiday season and beyond. We and everybody else thought we could start moving Atlantic City forward, but it is unfortunate that one person could put the brakes on all that.”
The union currently has 1,110 employees at the Trump Taj, just over a third of the workforce. They have been working without a contract since mid-September after a bankruptcy judge allowed the Taj to terminate their contract. The union is appealing and Icahn has been working to get them to drop the deal. It is uncertain at this time why he backed out of the deal.