The bankrupt Trump Taj Mahal casino received court approval on Friday to break its labor agreement, a key condition for a rescue deal with billionaire Carl Icahn, and the union promptly announced a plan to picket the Atlantic City, New Jersey hotel.
Parent company Trump Entertainment Resorts Inc has said trimming $14.6 million from its annual union pension and healthcare costs is key to save the casino from becoming the fifth to close this year in the seaside resort.
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U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, said during a hearing that he would approve the request and would explain his reasoning in a written opinion next week.
The Unite Here Local 54 union will appeal the ruling, the union's lawyer, Kathy Krieger of the law firm James & Hoffman, told the court.
Facing competition from gambling venues in nearby states, four casinos have closed this year in the seaside resort, including Trump Entertainment's smaller Atlantic City casino, Trump Plaza. The Taj Mahal employs more than 3,000 and about a third are union members.
The union said it plans to picket the Taj Mahal on Oct. 24.
"We intend to continue to fight this both in the courts and in the streets," said a statement from the union's president, Bob McDevitt, who blamed Icahn for the loss of worker benefits.
"He has a long history of eliminating, reducing or freezing worker benefits which sometimes saddles government agencies with the burden of cleaning up the mess," said McDevitt.
The union also represents workers at the eight remaining casinos, including the Tropicana, which is controlled by an Icahn affiliate. Earlier this month, hundreds of workers blocked traffic in the city to protest the move to end union benefits at the Taj Mahal and more than 20 people were arrested.
Icahn, who is Trump Entertainment's lender and controls the company's cash, has rejected the union's criticism. He is owed $292 million, a portion of which he plans to convert into ownership of the casino.
Icahn has said he was presented the rescue plan by Trump Entertainment and asked to provide a $100 million investment if the company achieved its labor cost cuts. The rescue plan also requires tax concessions by the city and state, which politicians have refused to endorse.
Trump Entertainment has offered to move employees to defined contribution 401k savings plans and increase pay by $2,000 annually to defray health insurance costs.
Real estate developer and reality TV celebrity Donald Trump has said he no longer has a stake in the company that bears his name, which is going through its fifth bankruptcy.
The case is In Re: Trump Entertainment Resorts Inc, U.S. Bankruptcy Court, District of Delaware, No. 14-12103
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Diane Craft and David Gregorio)