U.S. Bankruptcy Judge A. Benjamin Goldgar has denied Caesars Entertainment Operating Company (CEOC) permission to appeal his July 22 ruling which has allowed bondholder lawsuits in other states to proceed while CEOC continues its Chapter 11 reorganization. Judge Goldgar wrote, “I’m not convinced a direct appeal will expedite anything here.”
By releasing the other lawsuits to move forward, the judge is demonstrating his refusal to protect the parent company, Caesars Entertainment Corporation (CEC), and at the same time reinforcing the distinction between the parent company and the company’s operating unit that has filed for bankruptcy protection. CEC claims that such actions may very well push the parent company into bankruptcy also.
At the same time, Bloomberg Business reports that Stephen Cohen, a spokesperson for CEC recently stated, “We believe our defenses in the New York litigation are strong, and will continue to contest those cases vigorously.” He went on to clarify that the judge’s ruling was merely procedural and did not address the merits of Caesars’ position.
While some litigators, such as Bloomberg’s legal consultant Bruce Grohsgal, see CEOC’s legal maneuvering as “complicated”, Bloomberg analysts like Julia Winters have voiced skepticism of Caesar’s tactics, stating that primary stakeholders, Apollo and TPG, need to relinquish ownership stakes in lieu of reduced cash settlements.