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Supreme Court lets bankrupt former Trump casino cut pensions, benefits

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Wayne Parry/AP/File

(Read caption) This photo from earlier this month shows a gambler playing the slot machines at the Trump Taj Mahal casino in Atlantic City, N.J. The Supreme Court rejected a challenge by workers at the casino, formerly owned presumptive GOP presidential nominee Donald Trump, to restore their employment benefits.

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The U.S. Supreme Court rejected a union challenge seeking to restore health and pension benefits for more than 1,000 workers at the Trump Taj Mahal casino in Atlantic City.

The justices on Tuesday let stand lower court rulings in favor of the former Trump Entertainment Resorts, once run by presumptive Republican presidential nominee Donald Trump.

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The company filed for bankruptcy protection in 2014 and a federal bankruptcy judge imposed cost savings sought by the company. They included terminating health insurance and pension benefits for unionized workers.

The company gave workers cash stipends to purchase health insurance on their own through the Affordable Care Act, but many workers say it has been insufficient for them to purchase coverage.

Local 54 of the Unite-HERE union represents most casino workers and it appealed the judge's order. The union said labor law prohibits an employer from abandoning a collective bargaining agreement, even in a bankruptcy.

A union official said it would issue a statement reacting to the decision soon.

Local 54 has authorized a strike against the Taj Mahal, but thus far has not walked off the job.

Billionaire investor Carl Icahn stepped in to buy the casino out of bankruptcy court and is keeping it open. Icahn took control of the casino in March, but had been keeping it afloat during its bankruptcy.

He repeatedly said that if a higher court restored the benefits that were canceled by the bankruptcy court, he would withdraw financial support from the casino and shut it down. Icahn says the benefits Taj Mahal workers used to receive are unaffordable in Atlantic City's current, slimmed-down shape. Four of the city's 12 casinos went out of business in 2014, buffeted by competition from casinos in nearby states.

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Icahn is investing $15 million on immediate upgrades at the casino, which is making an ambitious effort to win back business it lost during its bankruptcy.