The Trump Taj Mahal, owned by Trump Entertainment Resorts Inc filed for bankruptcy in September and closed their Trump Plaza Casino a few days later. The Taj Mahal had accumulated a huge amount of debt and was faced with liquidation several times. However, billionaire Carl Icahn who has a successful track record of taking on debt ridden enterprises and turning them around decided to extend a lifeline to the Trump Taj Mahal and bail them out.
The Icahn group put together a bankruptcy restructuring plan that was eventually approved by a federal judge on the 12th of March that will allow the Trump Taj Mahal to continue to remain open. The Icahn group did something similar 5 years ago when they acquired the debt ridden and bankrupt Tropicana casino before turning it around and making it a successful venture. Icahn has already provided $20 million in funds to help the Trump Taj Mahal continue its operation and pay its bills.
U.S. Bankruptcy Judge Kevin Gross said “The Taj will remain open and it will be a successful venture.” The Taj Mahal Casino will receive $13.5 million from the Icahn group after it leaves court protection.
Icahn was willing to bail out the casino but wanted a lot of concessions. Icahn wanted casino employees to be willing to forfeit their pension and health care benefits along with other amenities. Icahn believed that this show of support would enable them to keep their jobs at the casino and at the same time help the struggling casino to experience a turn around. However, the casino union was not happy with this proposal and has filed an appeal.
The Trump Taj Mahal also had to deal with another appeal filed by billionaire Donald Trump and daughter Ivanka Trump who objected to the ‘Trump’ name being used by the Trump Taj Mahal. The ‘Donald’ stated that he did not have a controlling stake in the casino and did not want his name to be used in a venture that had failed as it brought his name and brand into disrepute. Carl Icahn stepped in and worked out a deal with Trump and closed the issue.
In a statement, Donald Trump said “I am happy to have reached a deal with Carl, someone who I have great respect for both personally and professionally. The Trump Taj Mahal, under the right leadership and with the proposed significant reinvestment in the property, can be, once again, a wonderful place for travel and entertainment.”