An attorney for Trump Taj Mahal told a judge Tuesday that
the casino-hotel can't stay open through November if its bankrupt parent
company keeps making union pension payments.
Kristopher Hansen, representing the parent, Trump
Entertainment Resorts, said in a telephone conference that the company wants
court approval to replace the payments with 401(k) plans.
The change is part of a package of proposed union
concessions that would impact about 1,100 unionized Taj workers and save
cash-starved Trump Entertainment Resorts $14.6 million annually, the company
says.
Hansen suggested the 401(k) plans are preferable to the
workers’ current multi-employer pension plan, which he said is underfunded by
about $200 million and, due to factors beyond Trump Entertainment's control,
likely to collapse.
He said it’s only a matter of time before that plan
““winds up going bust and has to saddle the participants in the plan.” Taj
workers “probably will never receive the payment that we and other participants
have been making for so many years,” he said.
William Josem, an attorney for UNITE-HERE Local 54, which
represents the workers, said the multi-employer plan is “troubled” but “not
going belly up any time soon … if it ever does.”
He said the concenssion being sought from housekeepers,
cooks and other low-paid workers are “extremely, extremely difficult” to
accept.
In addition to nixing the pension payments, Trump
Entertainment Resorts wants to stop paying into a union health fund and have
the workers obtain coverage through the Affordable Care Act.
Bob McDevitt, president of Local 54, opposed those
proposed concessions on Monday, saying in a statement that they “would result
in a 35 percent reduction in total compensation.”
U.S. Bankruptcy Judge Kevin Gross called the conference
after Trump Entertainment Resorts asked him to cancel the company’s labor
contract with Local 54 and force the concessions by court order. Gross is
slated to hold a hearing Thursday on that request.
But the union concessions are ujst one compoent of a
package of concessions needed to keep Trump Taj Mahal open through November,
the company says. It says it needs major property-tax relief, $25 million from
the Casino Reinvestment Development Authority or another government agency, and
debt forgiveness coupled with capital from its main lender.
Carl Icahn, who controls about $286 million in first-lien
debt secured by Trump Taj Mahal and the defunct Trump Plaza Hotel and Casino,
has suggested that he is open to turning debt into equity and providing $100
million in capital to Trump Entertainment Resorts. But only if the union and
government officials deliver the other concessions.
On Monday Atlantic City Mayor Don Guardian rejected Trump
Entertainment’s request for property-tax relief.
Company attorney Kristopher Hansen said during Tuesday’s
conference that talks with the Mayor are continuing and that the company is
trying “to bring a summit together” so stakeholders can find a way to save
Trump Taj Mahal.
A spokesman for the mayor could not immediately be
reached for comment.
Source: The
Press of Atlantic City
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