As Donald Trump has been campaigning to become the Republican Party’s nominee in the 2016 Presidential Election, we’ve heard a lot about his businesses – especially the ones that have gone bankrupt. However, one of those businesses – the Trump Taj Mahal casino in Atlantic City – is set to exit bankruptcy and has been taken over by Carl Icahn.
Before anyone starts trumpeting any wins for Trump here, note that he hasn’t owned or had anything to do with the casino since 2009 other than allowing them to use his name in exchange for a ten-percent stake. While his name remains, Icahn, a billionaire investor, has taken over. Icahn has been investing heavily in the area as he now owns the two largest casinos in the neighborhood (he also owns the Tropicana).
The Trump Taj Mahal casino has been in bankruptcy proceedings since 2014 as a court ruled on whether or not ownership is responsible for its union workers’ pension and health insurance benefits. Icahn has been battling with the unions, trying to convince the courts that the company simply doesn’t have the resources to pay pensions and health care insurance, and if the court forces him to take on those costs, then he’d back out.
However, the court ruled in his favor, which is why he proceeded with the takeover.
While exiting bankruptcy is surely a good sign for the Trump Taj Mahal, there is still plenty of work ahead. For starters, Icahn needs to smooth things over with the union workers. The litigation has caused plenty of friction between Icahn and the president of Local 54 of the Unite-HERE casino workers union, Bob McDevitt.
Beyond that, the Trump Taj Mahal has to figure out how to start turning a profit once again. Last year, the casino raked in $180 million in winnings, which seems like quite a substantial number but that ranked seventh out of eight casinos in Atlantic City. That number is also down 16.5 percent from 2014.
To improve the earnings it will be up to Icahn and his team to push the right buttons, but it’s pretty clear that he feels like he knows what he’s doing. With two of the biggest casinos in the area under his wing, Icahn is betting big time on Atlantic City – and the Trump Taj Mahal’s – turnaround.