Trump Entertainment Resorts filed for Chapter 11 bankruptcy protection Tuesday, warning that Trump Taj Mahal — one of its two Atlantic City casinos — could be closed by mid-November.
The other casino, Trump Plaza, is slated to close Sept. 16.
The casinos’ debt-ridden parent company said in court papers filed in Delaware that, “absent expense reductions,” Trump Taj Mahal could close Nov. 13 or shortly thereafter.
Darrell Stark, business agent at IATSE Local 917, which represents entertainment stagehands, said a manager at the casino hotel notified him Tuesday morning that his workers should expect to receive WARN letters in the next 48 hours. Ben Begleiter, spokesman for Local 54 of UNITE HERE, which represents thousands of casino hotel service workers, confirmed that the letters, required by federal law to give workers 60 days’ notice of possible mass layoffs, are forthcoming.
Trump Taj Mahal employed 2,963 people as of Aug. 30, most of whom are full-time workers, according to court papers.
Nearly 5,000 casino hotel workers lost their jobs when Showboat Casino Hotel and Revel Casino Hotel closed in late August and early September. About 1,000 more jobs will vanish when Trump Plaza closes next week. And about 1,600 Atlantic Club workers lost their jobs when that property closed in January.
“It’s really a shame. You can tell it’s much quieter,” said Dot Federkiewicz, 85, of Hamilton Township in Mercer County, who was sitting outside the Taj on Tuesday after having been driven to the casino on a tour bus.
“There are too many casinos here and then you have online gambling,” she said, blaming the combination for the shutdown of the casinos.
Alex Bumazhny, a casino analyst at Fitch Ratings, said last week that “just because you’re in bankruptcy doesn’t necessarily mean you’re going to close.”
He said the property could emerge stronger after undergoing the Chapter 11 process.
“Typically, you’ll shed some debt. You’ll also have the opportunity to cancel any contracts that aren’t profitable” and possibly renegotiate union contracts, he said.
Robert Griffin, CEO of Trump Entertainment Resorts, told a bankruptcy court judge in a Tuesday filing that his company is shouldering more than $285 million in debt. He said the company’s casinos have been rocked by competition in the regional casino market, severe weather and a general economic downturn in South Jersey.
The company’s dire condition is “likely to be further exacerbated by, among other things, the legislative effort currently underway to legalize gambling in New Jersey outside of Atlantic City,” he wrote.
And, he said, Local 54, the main union representing employees at the company’s casinos, has been unwilling to modify its burdensome collective bargaining agreement
Company representatives met with the union and “provided a proposal that would facilitate a feasible business plan premised upon certain modifications to be made to the … (agreement) with Local 54. The company was subsequently informed by representatives of Local 54 that they were unwilling to make the proposed concessions,” he wrote.
Bob McDevitt, president of Local 54, fired back in a statement Tuesday, saying, “It’s unfortunate that Trump (Entertainment Resorts) wants to play the blame game.”
“If our members were to work for minimum wage with no benefits, it wouldn’t be enough to keep this property in the hands of its current owners for a year,” he wrote.
And while the company’s employees await word on their futures, visitors say they can also feel the somber mood in the air.
“It used to be a lot more jovial, everyone had an up feeling,” Judy Lyons, 68, of Hamilton Township in Mercer County, said outside the Taj on Tuesday.
Her last visit to Atlantic City was about two years ago, and in comparison to her visit Tuesday, that trip had a better vibe, she said.
“It feels like they just want your money. There’s no more entertainment, its not an entertaining machine,” said Lyons’ daughter, Jody Kevett, 47, of Trenton.
“Things that made you feel like coming are gone. There is no incentive,” Lyons said.
They explained that the types of entertainment and gimmicks found inside the casinos have been reduced or eliminated, and just tables or slot machines are available.
“And there are no $5 tables anymore. It’s too much money for seniors to be paying $10,” Lyons said.
In a court filing Tuesday, Taj Mahal estimated it has assets of $100 million to $500 million and liabilities of $500 million to $1 billion. It said it had 1,000 to 5,000 creditors.
Trump Taj Mahal indicated in a quarterly report released in August that a restructuring was on the horizon.
The property told state casino regulators it would be hard-pressed to fund its operation without “significant revenue increases and improvements in its operating results.”
“There can be no assurance that the company will achieve such revenue increases or that it will be successful in obtaining additional sources of liquidity,” it told regulators.
A hearing is scheduled for this morning at bankruptcy court in Wilmington, Del., where casino attorneys are expected to lay out a plan to keep the casino open as its parent company tries to restructure its debt and stabilize its business through the Chapter 11 process.
Staff Writer Anjalee Khemlani contributed to this report.
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