Hard Rock Cafe Issues Layoff Notices Contingent on Trump Taj Mahal’s Closing

The Hard Rock Cafe in Atlantic City could close in the coming months, but if the cafe’s parent company can be believed, only if the Trump Taj Mahal is forced to close. The Press of Atlantic City reported this week that the Hard Rock Cafe, which is situated inside the Trump Taj Mahal overlooking the Boardwalk, has sent layoff notices to its various employees.

The Hard Rock Cafe’s management insist those notices were only a precaution. They were sent to warn employees of the possibility they might close, if the Trump Taj Mahal itself closes. Hard Rock International issued its own press release to assure it still believes in Atlantic City, and supports the city’s transformation to a non-gaming economy. The corporate office pointed out its relationship with the city stemming back to 1996.

70 Workers Received Layoff Notices

Despite that spin on the story, a notice was filed on Wednesday with the Department of Labor and Workforce Department that the Hard Rock Cafe would lay off 70 workers by April 22. The filing stated the reason for those layoffs was the bankruptcy of the Trump Taj Mahal, which imperils all businesses inside the building.

The Trump Taj Mahal filed for bankruptcy in the fall of 2014, just weeks after the bankrupt Trump Plaza closed its doors. The casino, owned by Trump Entertainment Resorts, was expected to close on November 13. That date got pushed back two weeks into late-November, and then had the closing date pushed back twice more during December.

Icahn Negotiations

Meanwhile, the Trump Taj Mahal‘s top creditor, activist investor Carl Icahn, was negotiating with the Trump Taj Mahal’s workers union, Mayor Don Guardian of Atlantic City, and the New Jersey state legislature to get economic breaks that would allow the casino to stay in business.

Icahn eventually got a judge to temporarily suspend the benefits he wanted the union members to sacrifice–health and pension benefits–to keep the casino going. That created tremendous acrimony, along with unseemly demonstrations in Atlantic City. Unable to negotiate a permanent settlement at the 11th hour, Carl Icahn offered to fund the casino with $20 million to keep it open into 2015. That announcement came on December 23, 2014.

Carl Icahn’s Letter

Carl Icahn wrote an open letter to Trump Entertainment Resorts’ chief executive officer, Robert F. Griffin, in which he state publicly his motivations throughout the tough negotiations and continuing bankruptcy process.

Icahn wrote, “Even though I believe that Atlantic City will be great again someday, many people would still argue that it would be a better financial decision for me to let the Taj close. But I cannot be so callous as to let 3,000 hardworking people lose their jobs.”

That is where Trump Taj Mahal is situated at the moment, with the proverbial Sword of Damocles over the many business owners and workers in the Trump Taj Mahal building. The Hard Rock Cafe had tried to get Carl Icahn to commit to keeping the casino resort open during bankruptcy proceedings last fall, but that bid failed in court.

Hard Rock’s Plans

Hard Rock International, the parent company, said they plan to operate through the balance of the lease. Unless the Trump Taj Mahal closes, the Hard Rock Cafe will not close.

The employees’ advance notices were given according to provisions of the WARN Act. If the Trump Taj Mahal’s bankruptcy plan is not approved and the casino is closed, then Hard Rock Cafe has given due warning to its employees.

Hard Rock International said in a prepared statement, “Since opening its doors in 1996, the brand has been and continues to be committed to Atlantic City and brand expansion within New Jersey.

Atlantic City continues to face significant economic troubles, while several of the casino enterprises in the city face their own financial troubles. Four of the twelve casinos in Atlantic City closed last year, leading to a major loss of revenues for the city. Currently, Atlantic City is borrowing $40 million from the state of New Jersey, which led to a financial  overseer being sent on behalf of the state. Meanwhile, Atlantic City’s city council has had trouble borrowing money on the financial markets, due to its credit rating being lowered by New York City financial institutions.

About Cliff Spiller

Cliff Spiller has been an online writer for 14 years. He worked for Small World Marketing for a decade, where he covered topics like gaming, sports, movies, and how-to guides. Since 2014, he has blogged about US and international gambling news on BestOnlineCasinos.com, USPokerSites.com, and LegalUSPokerSites.com

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