Et tu, Caesars? Caesars Entertainment Corp. inched closer to bankruptcy after a federal judge refused to protect the casino company from creditor lawsuits. Their stock plummeted after the news. The bankruptcy judge says Caesars Entertainment can be sued for trying to hide assets like Harrahs from creditors. That’s a serious blow to Caesar’s effort in getting approval of their bankruptcy restructuring plan.
Caesars (CZR) has $18.4 billion in total debt.
Caesars, formed with 2008 buyout of Harrah’s Entertainment, has been shuffling casinos and properties within the company’s portfolio as it struggled with crushing debt and growing losses. Creditors say that the best assets, like Harrahs Atlantic City, have been moved beyond their reach. We call that financial monkey business.
Caesars shareholders will likely lose everything and debt holders will restructure or split up the company.
Caesars Monkey Business Explained.
In 2013, Caesars Acquisition Company was created to protect the “good assets” like online poker, Planet Hollywood & Harrahs. The “bad assets,” like debt, were left behind for lower priority stakeholders.
Judge Goldgar recently ruled that the lawsuits filed against the Caesars Entertainment by creditors challenging asset transfers leading to the restructuring plan with first-lien bondholders can go forward while the operator’s bankruptcy case is ongoing.
Investors have lost about 80% of their money with Caesars.
Mark Frissora was confirmed as the new president and chief executive officer of Caesars Entertainment Corp on JUNE 30 2015, replacing 12 year CEO Gary Loveman. Frissora was the former chief executive of vehicle rental firm Hertz Global Holdings. Loveman continues to serve as chairman of the board.
Frissora’s annual base salary is $1.8 million with a target bonus of $2.7 million. He is also entitled to use the company plane, and received six months of free housing while he relocated, and associated costs and benefits. If he’s fired without cause, Frissora’s severance deal includes $6.3 million in cash, according to the filing.
WATCH VIDEO; The Financial Fumble of Caesars >
Former Caesars CEO Gary Loveman is a college professor / economist who taught at Harvard Business School, and developed strategies for customer relationship management at Caesars.
Watch Loveman’s talk at the Haas School of Business at the University of California, Berkeley:
See more at: http://ggbnews.com/issue/vol-13-no-30-july-27-2015/article/caesars-lawsuits-can-go-forward#sthash.pdjvU6zW.dpuf