By David Madden and Cleve Bryan
ATLANTIC CITY, N.J. (CBS) — Once the crown jewel of the Atlantic City casino industry, the Trump Taj Mahal filed for bankruptcy Tuesday and gave employees notice they’ll be laid off by mid-November.
“The Trump Taj Mahal is expected to close on or shortly after November 13, 2014, with all operating units expected to be terminated between November 13, 2014 – November 27,” said part of a notice sent to employees.
Trump Entertainment has filed for federal bankruptcy protection for its Taj Mahal casino-hotel in Atlantic City, just a week before its sister property, Trump Plaza, is set to close down.
In a surprise press release, the company said it would shut down the Taj Mahal on or after November 13th if it doesn’t get major concessions from its creditors and the union representing its casino, hotel, and restaurant workers.
It’s not that the filing, in Delaware Bankruptcy Court, wasn’t expected.
Workers have not yet been issued the federally mandated employment-loss warning letters. But there were reports suggesting the place could close in mid-November. If the warning letters go out in the next few days, that would meet the 60-day legal requirement.
The company owes creditors $285 million and according to a financial report for the first 6 months of 2014 Trump Entertainment is having a hard time making enough money to meet expenses.
“It’s sad for the people, I don’t know where they’re going to get a job,” said Taj Mahal customer Patricia Traver.
Taj Mahal could become the 5th Atlantic City casino to close this year with Trump Plaza the next to shutdown next week.
At the end of July there were about 2,800 employees so in all more than 10,000 Atlantic City casino workers could become unemployed in 2014.
“It’s scary but we’re still keeping hope,” says Kaushik Vashi who works in housekeeping at the Taj Mahal with his wife Bina Vashi.
Their union leader Bob McDevitt, president of Unite Here Local 54, believes the Taj will get a new owner rather than close.
“I believe that the Trump organization is trying to capitalize on the fear of workers in Atlantic City to get concessions that no other casino in this city has even considered,” says McDevitt.
He says during negotiations last week management at Taj Mahal asked if union employees would consider giving up health and retirement benefits to reduce operating costs.
“No one is willing to give up their healthcare and their retirement so people who have mismanaged the property into the ground get a few more months of salary,” says McDevitt.
McDevitt, president of “Unite Here” local 54, issued a statement that said in part, “It’s unfortunate that Trump wants to play the blame game, but the fact is that Taj Mahal had the 5th highest gaming revenue in Atlantic City so far this year, and Trump’s management has failed to capitalize on over $130 million in gaming revenue so far this year from Taj Mahal. Fundamental to Trump’s problems is the fact that the company has almost $300 million in debt.
“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.”
Trump Entertainment did not respond to requests for comment.