Carl Icahn Accuses Trump Taj Mahal Workers of Lies and Intimidation Tactics
Atlantic City casino mogul Carl Icahn and the local casino unions continue to quarrel over pension benefits, months after the two sides began negotiations. In the latest round of conflict, both sides have taken to the newspapers to blame the other side for making trouble.
A judge’s decision on Icahn’s plan to become majority owner of Trump Entertainment is expected on Wednedsay. The court date prompted some of the activist investor’s potential employees to make a trip to his business offices, which in turn prompted a reacton from the potential new owner of Trump Entertainment.
Lies, Intimidation, and Threats
Carl Icahn is now accusing Local 54 of the Unite-HERE union of “lies, intimidation, and threats” in their continuing negotiations. Icahn also said they use these tactics to get companies to contribute to pension funds he labeled as “critically underfunded“.
Icahn’s comments were made on Tuesday after he was informed that members of Local 54 drove to his offices on New York City’s Fifth Avenue to deliver a letter. In the letter, the union members said the Trump Taj Mahal’s benefit cuts were “not OK”.
Benefits Package at Stake
Local 54 is seeking to reverse an October 2014 court decision which would allow Trump Entertainment Resorts to terminate health insurance and pension benefits. Icahn says his new gaming company needs those changes to the union contract the survive as a business enterprise. The union workers accuse Icahn of stripping away basic benefits for the sake of making a bigger profit.
Tuesday’s letter delivery was the eighth public protest by the workers union since last October. In several cases, the union picketed in the streets outside of Icahn’s casinos. They were joined by employees of other casinos at certain times, because local labor laws require uniformity of working conditions and benefits.
Union members would argue that any employee would be upset to have their health and pension benefits stripped away from them. Some people have worked for casinos for decades, assuming they would have a pension. Having that removed in many cases would throw all plans for retirement into disarray.
Carl Icahn’s Perspective
Carl Icahn would argue that no one else was going to rescue the Trump Taj Mahal. It was days from closing in November and December 2014. Eventually, he agreed to front $20 million to keep the casino operating throughout 2015. Under those conditions, Icahn believes he has saved these people’s jobs, so they should be grateful to have a job at all.
Those people would answer Icahn spent the $20 million to save a much bigger $280 million investment–and they don’t trust him when he says the benefits package has to go in order to run viable business.
Judge Likely to Decide
Under the circumstances, neither side is likely to give ground. A judge is almost certain to have to arbitrate the dispute, likely rendering a decision. The Trump Entertainment/Local 54 dispute seems like a classic case where a judge might be the most qualified to determine which side has the better argument.
Approval for Trump Ownership
On Wednesday, New Jersey gaming regulators are set to decide whether Carl Icahn will be approved to become the majority owner of Trump Taj Mahal, which he purchased earlier in the spring of 2015. Since Icahn already owns the Tropicana and has a solid reputation for having turned around that business in a 5-year span, approval is expected to be a slam dunk.
Before the deal was announced that Icahn would be buying Trump Taj Mahal for certain, Donald and Ivanka Trump were suing Trump Entertainment Resorts with the intention of having their family name taken off their old casino properties. The week it was announced Carl Icahn would be taking over operations, both Ivanka Trump and “The Donald” expressed their pleasure with the news. The Trumps consider Carl Icahn a family friend, and both father and daughter expressed confidence he would turn around the fortunes of Trump Taj Mahal.
Five years ago, Icahn took over the Tropicana. At the time, that casino also faced mounting debt and possible bankruptcy. He re-energized the work staff, invested money for upgrades in the property, and changed the philosophy of the casino to attract more high rollers. These days, the Tropicana is seen as one of the few successful casino ventures in Atlantic City.
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