\nThe latest potential savior for Atlantic City\u2019s Trump Taj Mahal casino is one many had been hoping would step in\u2014billionaire Carl Icahn.<\/p>\n
\tAccording to a report in the New York Post\u2014which quoted unidentified sources\u2014Icahn is considering investing $100 million into the struggling casino, but would first want major concessions from the city\u2019s casino unions, mainly Local 54 of UNITE HERE, the union that covers most of the hotel and F&B workers.<\/p>\n
\tThose concessions include a loss of health benefits for many worker as well as replacing pension benefits with 401Ks. Local 54 officials have said they will not agree to those terms.<\/p>\n
\tAccording to the Post, however, Icahn would not move without the concessions.<\/p>\n
\tThe casino is owned by Trump Entertainment Resorts, which filed for bankruptcy earlier this month and has already closed its other Atlantic City casino Trump Plaza. The company is trying to restructure by October 3. Icahn is the company\u2019s principal debtor\u2014owning the mortgages on both Trump Plaza and the Taj Mahal\u2014and is owed about $286 million.<\/p>\n
\tIcahn has agreed that he would exchange his $286 million in debt for equity if the deal comes together, the Post reported.<\/p>\n
\tThe company\u2019s current owners\u2014a group of hedge funds led by Avenue Capital\u2014bought the company out of another bankruptcy in 2009, beating out a rival bid from Icahn.<\/p>\n
\tAccording to the Post, the company is no longer interested in investing in the casino and is seeking to stop health care benefits to employees making less than $30,000. The group wants those employees to seek insurance through the Affordable Healthcare Act.<\/p>\n
\tThe company estimates it pays about $10,000 a year per employee for health insurance. The group would rather pay a $2,000 a year penalty for not offering health insurance under the act, the Post reported.<\/p>\n
\tThe group also wants to end pension benefits for employees in favor of a 401K plan.<\/p>\n
\tUnion officials, however, have questioned just how much those moves would save the company considering it has listed liabilities of $100 million to $500 million.<\/p>\n
\tStill, if Icahn is to move, he wants similar concessions, the Post said.<\/p>\n
\tIf a solution isn\u2019t found, the company plans to close the Taj Mahal in November. That would be the fifth Atlantic City casino to close this year, affecting more than 13,000 jobs in total.<\/p>\n
\tIcahn did not comment on the report.<\/p>\n
\tIcahn already owns Atlantic City\u2019s Tropicana Casino Resort where he did manage to move employees out of a pension plan to a 401K plan. Icahn also has an ongoing feud with Local 54 and faces contract negotiations by the end of the year at the Tropicana.<\/p>\n
\tDonald Trump has also been reported to be interested in saving the casino and re-emerging as a player in the company that still bears his name. Trump currently has less than a 10 percent stake in Trump Entertainment, but has said he is looking at the Taj and may move if the price is right <\/p>\n
\tAll in all, it\u2019s a lot of ifs.<\/p>\n
\tMeanwhile, Trump Entertainment has asked the bankruptcy court to allow it to sell off its assets including gambling equipment and furniture from the now-closed Trump Plaza. Lawyers for the company say it needs the cash for the bankruptcy proceedings and wants to avoid the expense of maintaining and storing the equipment.<\/p>\n
\tTrump Entertainment CEO Bob Griffin said the proposed sale includes older slot machines from Trump Plaza, but did not specify how many would be sold.<\/p>\n
\tTrump Plaza has 56 table games and just under 1,600 slot machines according to state records. It is seeking to sell \u201cgaming equipment, equipment, furniture, supplies, fixtures, and other miscellaneous personal property.\u201d<\/p>\n
\tThe company filed a motion for the sale, but a decision from the court has not been announced.<\/p>\n
\tThere is no question, however, that Trump Entertainment is having trouble with creditors. The company that maintains the Taj Mahal\u2019s fire suppression sprinklers has filed a motion with court to end its contract at the casino saying it is owed more than $250,000.<\/p>\n
\tUltimate Gaming, which was the casino\u2019s online gambling partner, has also ended its relationship with the casino and shut down its sites in New Jersey. The company says it is owed $1.5 million by the Taj in online revenue.<\/p>\n
\tMeanwhile, Betfair continues to operate its online site despite the fact that its casino partner Trump Plaza has closed. The state gave Betfair about 90 days to find another partner. There has been speculation that it would join with the Taj Mahal as a casino partner, but that now seems unlikely and the site may also close.<\/p>\n
\n\tRevel Auction Delayed<\/p>\n
\tThe fate of another of Atlantic City\u2019s closed casinos\u2014the Revel casino\u2014is also still up in the air as a bankruptcy auction for the property was closed last week without naming a buyer and will resume September 30.<\/p>\n
\tBidders for the casino gathered in New York last week, but no decision on the auction was made and the auction was extended without any bids actually being made.<\/p>\n
\tFlorida-based developer Glenn Straub has made the only announced qualified bid of $90 million for the property, which cost $2.4 billion to build. But Stuart Moskovitz, Straub\u2019s attorney told the Press of Atlantic City that no movement on the auction was made at the session.<\/p>\n
\t\u201cAbsolutely nothing was done today,\u201d he said.<\/p>\n
\tInstead, Revel\u2019s lawyers held closed-door discussion on offers for the property even though the bid deadline has passed. Moskovitz said that \u201ctainted\u201d the process.<\/p>\n
\t"There are serious concerns about what’s taking place," he said.<\/p>\n
\tStraub also complained about the lack of progress. He told the paper that extending the auction was a tactic to increase billable hours for Revel\u2019s legal team.<\/p>\n
\t\u201cIt just gives you a dirty feeling, like you want to take a shower,\u201d he said.<\/p>\n
\tHowever, Bankruptcy judge Gloria Burns had previously advised attorneys to close the auction before the start of Rosh Hashanah, which started at sundown of the day the auction was held. Revel attorneys said they had followed the court\u2019s procedures and called any allegation of wrongdoing unfounded.<\/p>\n
\tWhat is unclear, however, is exactly how many bids have been made on the property, which was not disclosed after the first auction session. Moskovitz told the Associated Press before the session that he had been advised that multiple other offers for the casino had been made.<\/p>\n
\tOther reports say at least two other offers were made at the deadline for bids. Reuters, citing unidentified sources, reported that the bids came from a party involved with casino gaming outside New Jersey and a real estate developer, but did not name them.<\/p>\n
\tOne previous bid, from Miami-based developer Richard Meruelo, has reportedly been deemed unqualified. It\u2019s not clear if Meruelo has refined his offer and is one of the last-minute bidders.<\/p>\n
\tThere have also been moves by companies operating within Revel to stay open. The owners of a successful nightclub on the property have petitioned the court to allow it to stay open and now the Garces Group\u2014operators of four restaurants at the site run by Philadelphia chef Jose Garces\u2014has also asked the court to be allowed to continue to operate if the casino is sold.<\/p>\n
\tStraub said further delays could cause him to back away and continues to offer a diverse and somewhat eclectic vision for what he hopes to build in Atlantic City.<\/p>\n
\tStraub, who is looking to acquire more land in the resort, has said he envisions a casino still operating at the property\u2014though through a casino management company\u2014major sports and entertainment venues and now a university and think tank at the site.<\/p>\n
\tStraub told Reuters he wants to use the site to help end world hunger, cancer, and resolve other pressing issues like nuclear waste storage. He envisions adding a second tower to the site as was part of the original plans for the property.<\/p>\n
\tStraub did take some heat, however, for saying his ideal student is "free, white and over 21," meaning they have no financial obligations. But Atlantic City, a city with a community consisting mostly of minorities, didn\u2019t let that comment slide. Straub would be unwelcome should he win the bid.<\/p>\n
\tHe also envisions high-speed rail and ferry routes connecting the resort town to New York City, and an improved airport that could draw more vacationers.<\/p>\n
\tStraub, in numerous interviews has certainly developed a reputation for shooting from the hip. He was even quoted several times calling Revel \u201ca monstrosity\u201d that he could live without.<\/p>\n
\tIt has left many in the city wondering what to make of him.<\/p>\n
\t"When you start off with these kinds of ideas, to my eyes, it doesn’t give you a whole lot of confidence," Democratic Assemblyman Vince Mazzeo, who represents Atlantic City told Reuters. "But this gentlemen, if he ends up buying it, he’s going to have to open those doors, which equates to employment."<\/p>\n
\tIn other matters, the Revel Group LLC announced plans to terminate its license agreement for the branding of the property. The group says the brand was developed to highlight the property\u2019s non-gaming amenities, but recent events\u2014such as the casino and hotel being closed\u2014have not lived up to the agreement.<\/p>\n
\tSlot-machine manufacturer IGT has also asked Burns to order Revel to surrender gambling equipment stored at the property. IGT said the equipment collateralizes more than $3.6 million owed to the company. Burns said she would allow a $3 million \u201cbreakup fee\u201d to Straub if the former Revel property is sold to another buyer. Some contend that has been Straub\u2019s goal all along.<\/p>\n
\tAlso, ACR Energy Partners LLC said in a court filing that it \u201cmay be forced to commence its own bankruptcy case\u201d if Revel doesn\u2019t start pre-paying for the energy service it provides the property. The company has continued to provide power to the closed building, but received only small payments from Revel, it said.<\/p>\n
\tThe situation is considered serious as climate control in the building\u2014which requires power\u2014is needed to prevent mold and fungus in the interior.<\/p>\n
\tAnd finally, court documents reveal the casino owes Atlantic City about $20 million in taxes. City officials have said they will pursue tax liens to get the payment.<\/p>\n