Icahn’s olive branch

As the clock ticks down toward a Dec. 4 bankruptcy hearing at which Trump Entertainment Resorts could be dissolved, Carl Icahn is nothing if not optimistic. He continues to believe he can recoup the $286 million in debt he holds on Trump Taj Mahal, plus the $100 million he’s promised toward capital improvements. He’s also a realist, having now dropped preposterous demands for state and city tax subsidies. That dog was never going to hunt. However, he’s adamant that unionized workers accept the status of second-class citizens, bereft of pensions and having to shop for health care on the open market. That’s a precedent Unite-Here can’t afford to allow (next stop: Caesars Entertainment).

So, whilst Icahn and union prexy Robert McDevitt duke it out in court, they also struggle toward compromise. The tycoon is now offering partial restoration of pensions and healthcare packages, provided the union concedes paid break time, among other things. Icahn has also lent hapless Trump Entertainment Resorts a tidy $5 million to keep the Taj’s doors open through late January.

Donning his hair shirt, Icahn published an open letter to McDevitt that read, in part, “Bob, as you know, this is a bad investment for me at this time, evidenced by the fact that no one else is willing to invest even a dime. I’m amazed that the union is unwilling to agree to a company proposal that restores two years of health care, provides a new pension, keeps the Taj open and saves 3,000 jobs—basically ALL of the things that you and Senator [Stephen] Sweeney have asked for—if you just withdraw the appeal and give us labor peace … “As you know, it’s impossible for me to invest in the Taj Mahal while the appeal is pending, and even if you win the appeal, all it will do is ensure that the Taj Mahal closes. Do you really want your legacy, and that of Local 54, to be defined by closing the Taj and putting 3,000 people out of work unnecessarily? There is no time left to negotiate, and that is why the company and I have put everything on the table.”

There’s a lot of truth in what Icahn says. However, having picked a fight with Unite-Here, he’s not exactly an innocent bystander. He’s also chosen a pretty cocky sidekick in former Bozo the Clown sidekick Herbert L. Becker, who’s going to be his turnaround guy. Becker says he can achieve recovery “in pretty quick fashion. “I think the Taj can take the lead in turning Atlantic City around and Carl’s influence would be a great help. As goes the Taj Mahal, so goes Atlantic City.” (God help us!)

It’s clear that Becker hasn’t been looking at the numbers. As everybody else in Atlantic City is rising, given the recent market mega-correction, the Taj has continued to sink. It’s pretty big talk to say that, in the town dominated by the Borgata, you’re going to “take the lead.” Methinks Becker needs to get his ego in check.

* Dec. 17 is the tentative date for New York State casino bidders to either get a Christmas present or (in most cases) coal and switches. That’s when the New York Gaming Commission‘s casino-siting board is expected to choose four lucky winners from a pool of sixteen applicants. The odds favor Orange County — with nine applicants — to get as many as two casinos. One of the applicants there, Genting Group‘s Tuxedo project, has run into opposition from local environmentalists but is so far prevailing.