Are 3 more Atlantic City casinos…..and their parent company… prepping for bankruptcy? Yes. Will you…as a customer of these casinos, notice? The jury is still out on that one.
Caesars Entertainment is facing $11 billion in lawsuits that could force the gaming giant into bankruptcy. Locally, Caesars Entertainment owns Ballys, Harrahs, and Caesars in Atlantic City. Investors claim the owners of Caesars; Apollo Global Management and TPG Capital….were looting the company, lining their pockets with massive fees, while the casino giant was financially slipping.
A judge ruled that Caesars Entertainment must face creditor lawsuits that could force the nation’s biggest casino operator into bankruptcy.
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As the owners were trying to restructure their debt…..they came up with the bright idea to play a little shell game, a little flim-flam.
They divided the business into a profitable “good Caesars” with few debts and a “bad Caesars” that could be put into bankruptcy. Caesars, Apollo and TPG have all denied the allegations. They said nuh -uh. A judge did not agree.
ATLANTIC CITY > Caesars Must Face Judgment in Bondholder Suits, Court Rules
APOLLO is financially fueled in part by JOSH HARRIS, owner of the Philadelphia 76ers basketball and New Jersey Devils hockey teams. Private equity firms Apollo and TPG were alleged to have ‘asset stripped’.
After Caesars Boss Gary Loveman, teamed up with Apollo and TPG to take Caesars private in 2008, they amassed over $18 billion of debt. Note: Loveman was a Harvard Business School professor with no casino or resort background when he took the reigns of Caesars.
Caesars Entertainment shares crater as bondholder lawsuits loom. Atlantic City Council & local media yawn.
Fraud. If a company is insolvent, yet the people in charge move cash or other assets to themselves, they’ve stolen from creditors and need to give the money back.
FT Alphaville gives more detail:
Caesars went much further than standard capital market maneuvers, engaging in a series of complex sales of casinos and intellectual property as well as financings, allegedly to benefit its private equity owners Apollo Global and TPG to the detriment of creditors. The transfers bothered creditors. They filed multiple lawsuits in 2014 and 2015 accusing Caesars and its private equity owners of “looting” the company.