Principal creditor to keep Atlantic City casino afloat
News on 19 Dec 2014
News on 19 Dec 2014
Atlantic City’s struggling Taj Mahal casino resort has been handed another last-minute reprieve from shuttering by principal creditor Carl Icahn, who on Thursday pledged $20 million to stave of closure in the immediate future.
The casino, unable to meet its obligations, had been due to close this Saturday after union negotiations and a bankruptcy court hearing failed to find solutions (see previous reports).
In his pledge, Icahn promised Trump Entertainment Resorts that he will provide enough money to keep the casino open throughout the bankruptcy proceedings.
The Associated Press news agency reported that Icahn wrote to Trump CEO Robert Griffin:
“Many people would still argue that it would be a better financial decision for me to let the Taj close and wait to see whether a global settlement can be reached. But I cannot be so callous as to let 3,000 hardworking people lose their jobs.”
Icahn is on record as saying there are numerous reasons for him to walk away from the Taj Mahal.
“Trump Entertainment Resorts Inc. is one of the most distressed companies I have ever come across in my 50-plus years of investing,” he wrote.
“The company’s hometown of Atlantic City is in the midst of an unprecedented crisis. Intense competition from surrounding markets is steadily eroding gaming revenues for the city’s casinos. At the same time, relative to those surrounding markets, the costs of operating a casino in Atlantic City continue to escalate.
“As a result, four local casinos shuttered in 2014, and a once vibrant Atlantic City institution, your Taj Mahal, loses almost $10 million every month.”
Icahn is nevertheless hoping that he can make an acquisition deal on the Taj work if he can achieve tax breaks from the state government and cooperation from the workers’ union (see previous reports).
