Judge: Trump Taj can't withdraw from union pension plan, yet

In a blow to Trump Entertainment Resorts Inc.'s proposed reorganization plan, a bankruptcy judge in Wilmington on Friday denied a motion by the owner of Trump Taj Mahal Casino in Atlantic City to immediately withdraw from a union pension plan.

The proposal to cap its obligations under the defined-benefit pension plan is part of a broader effort to modify Trump Entertainment's contract with Unite Here Local 54.

A hearing on the motion to reject the entire collective bargaining agreement, or CBA, including the pension plan and company-sponsored health insurance, is scheduled for Oct. 14.

"The court does not have authority to reject a portion of a CBA," U.S. Bankruptcy Judge Kevin Gross said in a teleconference, according to a Bloomberg News report.

Rejecting the union contract that covers 1,136 of the Taj Mahal's 2,953 employees is part of a plan that would secure a $100 million investment from Carl Icahn, who holds a first lien on Trump Entertainment's property, including Trump Plaza, which closed Sept. 16.

Under the reorganization plan, affiliates of Icahn would trade $292 million in debt for 55 percent of the stock in the company and a $100 million note that would not require cash interest payments. Instead, the amount owed to Icahn would increase over the five-year term, the bankruptcy court filing said.