Lawsuits allege that Caesars Entertainment Corporation (CZR) improperly transferred good assets (ex: Harrahs Atlantic City) to their healthier parent company, and left their debt (bad assets) in CEOC, Caesars Entertainment Operating Co, which was doomed from the moment it was formed. These creditors say they’re owed $11 billion, and offers to restructure CEOC haven’t come close to meeting those demands.
Court-appointed examiner found creditors are likely right: wrongdoing at Caesars.
They may have claims again Caesars’ majority owners Apollo and TPG, both private-equity firms. But so far, the court has refused to allow for these claims, which would likely bring the parent into bankruptcy. More from MOTLEY FOOL
Creditors are willing to meet again with the operator, Caesars is not open to further discussions. Caesars recently offered the creditors $4 billion in cash, stock and debt to settle their claims—which was up from an original offer of $1.5 billion.
A bankruptcy court judge will not approve the Caesars restructuring plan
A bankruptcy court judge will not approve the Caesars restructuring plan without approval of at least half of the lower-level creditors—many of the same creditors who have filed lawsuits against the company because of major transactions that led to the restructuring plan, including asset transfers that moved major properties out of CEOC just prior to its January 2015 bankruptcy filing.
Plaintiffs in the lawsuits are seeking to have those transactions declared invalid, which could force parent Caesars Entertainment and its private-equity owners, Apollo Global Management and TPC Capital, into Chapter 11 bankruptcy. Read More in WALL STREET JOURNAL
Junior creditors have accused the private equity owners of inappropriately transferring assets to the parent company and moving debt to the CEOC unit. Ex: protecting good stuff like Harrahs Atlantic City