Trump loses bid to end pension payments at Atlantic City casino

(Reuters) — The Trump Taj Mahal casino failed on Friday to get immediate court approval to end its union pension obligations, a key condition for a $100 million rescue plan backed by billionaire investor Carl Icahn.

The setback may be only temporary for Trump Entertainment Resorts Inc., bankrupt owner of the Taj Mahal. U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware said he will consider the request again on Oct. 14.

“The debtor didn’t establish the immediate need for such relief,” Gross said.

Erasing the pension obligation is key to a deal to prevent the casino from being the fifth to close this year in the beleaguered New Jersey seaside resort, which has suffered as neighboring states have embraced gambling.

Atlantic City has lost thousands of jobs this year and Trump warned its 3,300 workers they could be laid off in the coming weeks.

Judge Gross said the U.S. Bankruptcy Code barred him from allowing Trump to reject permanently a portion of its collective bargaining agreement. But at the Oct. 14 hearing he could allow the company to reject the entire agreement, which would include the pension obligations as well as health benefits.

Trump has said the ending the pension obligation will save about $3.7 million annually.

A pension fund lawyer said on Thursday Trump was using its bankruptcy to clean up the business before handing it over to Icahn, the company's main creditor.