The interplay between the U.S. Bankruptcy Code and other federal laws often requires the court to balance competing federal policy considerations. Bankruptcy courts are often confronted with conflicting considerations regarding bankruptcy policy and tax, pension, and labor concerns, to name a few. In a recent decision issued Jan. 16 by the U.S. Court of Appeals for the Third Circuit in In re Trump Entertainment Resorts, No 14-4807 (Jan. 15, 2016), the court addressed a case of first impression among the courts of appeals: whether a debtor can reject the continuing terms of a collective bargaining agreement under Section 1113 of the U.S. Bankruptcy Code after the CBA has expired. And yes, given the current political environment, we felt compelled to report on a case that included the name Trump.

Casino Files Chapter 11 and Rejects CBA

According to the opinion, the facts were not disputed. The debtors owned and operated the Trump Taj Mahal casino in Atlantic City, New Jersey. It employed 2,953 ­employees, 1,467 were unionized, and 1,136 were members of Unite Here Local 54 (the union). The collective bargaining agreement provided for a term ending Sept. 14, 2014, and continuing in full force and effect on an annual basis unless either party gave 60 days’ notice of its intent to terminate, modify, or amend the CBA.

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