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Business
Trump Taj Mahal to Stay Open Into New Year, Lawyer Says
From the Wall Street Journal of Mon, 22 Dec 2014 11:47:42 EST

The Trump Taj Mahal will remain in operation through Christmas and into the New Year, due to a $20 million loan from secured lender Carl Icahn, a lawyer for the casino operator said Monday.

Erez Gilad, attorney for Trump Entertainment Resorts Inc., told U.S. Bankruptcy Judge Kevin Gross the new financing from Mr. Icahn will avert a shutdown of the Atlantic City Boardwalk casino while efforts continue to preserve it over the long term.

Announced last week, the $20 million loan commitment was signed Sunday evening.

The offer of a cash infusion “enables us to request, of course, to remain open and not have to close on the eve of Christmas,” Mr. Gilad said at a hearing in the U.S. Bankruptcy Court in Wilmington, Del.

The in-court announcement will come as a relief to some 3,000 employees, who have been told for weeks that their jobs could end with very little notice.

The loan will be considered at a court hearing in January. Trump Taj Mahal is safe at least until that time, Mr. Gilad said.

Judge Gross noted that the offered $20 million likely won’t be enough to keep the Taj Mahal open for another year of bankruptcy strife. The Chapter 11 proceeding that began in September has been marked by disputes over how to share the pain of a gambling business that has been eroded by competition from neighboring areas.

Mr. Icahn is walking away from an offer to put $100 million into the distressed gambling company, but the $20 million will keep the casino going while it tries to revamp its Chapter 11 exit plan, Mr. Gilad said.

Talks with the union representing more than 1,000 workers, Unite Here Local 54, will continue, with a goal toward a bankruptcy exit that has the Trump Taj Mahal open and operating, Mr. Gilad said.

The Trump Taj Mahal survived a number of shutdown deadlines after Trump Entertainment’s September bankruptcy filing. Monday’s announcement of new money, but no deal, pushes into next year a final decision about whether the Trump Taj Mahal will join the ranks of closed casinos along the Atlantic City Boardwalk.

Judge Gross had threatened to hand Trump Entertainment over to a bankruptcy liquidation trustee unless the company proved it had a chance of preserving its business.

Workers stripped of medical benefits and pension rights in bankruptcy court took to the Boardwalk in protest marches, joined, at times, by New Jersey lawmakers.

Mr. Icahn’s offer of $100 million in new money was conditioned on labor peace and $175 million worth of state aid for the gambling company. Unless renewed talks succeed, none of those elements will be part of Trump Entertainment’s future.

For a time, it appeared there would be a deal that would save the Trump Taj Mahal. The company offered to restore some benefits, which brought the union to the bargaining table. Tax breaks for boardwalk casinos, including the Trump Taj Mahal, began moving through the state legislature.

Late last week, however, Mr. Icahn refused to sign the deal agreed to by the company and union, pushing the Trump Taj Mahal back to the brink of a shutdown and the New Jersey legislation stopped moving.

Write to Peg Brickley at peg.brickley@wsj.com



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