CAESARS ENTERTAINMENT WINS TEMPORARY REPRIEVE OF CREDITOR LAWSUITS
JUNE 15, 2016
Beleaguered casino operator Caesars Entertainment has won a temporary reprieve from having to face creditor lawsuits.
On Wednesday, US Bankruptcy Court Judge Benjamin Goldgar told Caesars he had suspended bondholder lawsuits in Delaware and New York until Aug. 29. The period is shorter than Caesars had requested and Goldgar said the likelihood of him renewing the freeze after that date “will be slim.”
Junior creditors, who have been asked to bear most of the fiscal pain of this restructuring, have filed lawsuits accusing CEOC’s parent company Caesars Entertainment Corporation (CEC) of illegally shifting profitable assets out of CEOC into other CEC divisions prior to the bankruptcy filing.
The creditors have also accused CEC’s hedge fund owners Apollo Global Management and TPG Capital of conspiring to ensure that the parent company was absolved of the obligation to honor its subsidiary’s massive debts.
The Delaware trial, which involves $3.7b in CEOC’s debt, was scheduled to commence on Thursday. The New York trial, which involves over $7b, had a hearing scheduled for next week. Caesars has argued that if these courts find CEC liable for CEOC’s debts, CEC will have to join CEOC in bankruptcy court.