The corporation that filed for bankruptcy over six months ago, a major division of Caesars Entertainment Corporation, filed for bankruptcy, and now wants a Chicago bankruptcy court to approve a restructuring plan that could relieve the conglomerate of approximately $10 billion in debt.
On Friday, the fourth largest gaming company in the world said it reached an “amended restructuring support agreement,” with its largest lenders, and that attempts are being made to reduce a good percentage of company’s $22.8 billion in long-term debt. Complicating matters are continuing lawsuits from several of the company’s loan holders.
The plan for the restructuring remains the same and if the division that filed for bankruptcy succeeds, it will be reorganized and Caesars Entertainment Operating Corporation will be converted into a real estate investment trust setup that will split it into one part that owns casinos and the other that manages them. Caesars Palace, Caesars Atlantic City, Harrah’s Reno and several other properties in the region are controlled by the division that is $18.4 billion in debt. In a July, Caesars reached an agreement on the restructuring plan with a group of its second-lien debt holders. Among other specifics, the plan includes incorporating Caesars Growth Partners, another division of the company, back into the parent company.
Further complicating matters, last week Judge Benjamin Goldgar denied Caesars parent company any shelter from litigation by its creditors while the division that is operating is in bankruptcy. Had he done so, it would have prevented further litigation against it prior to a New York judge imposing billions in liability on the parent company. The decision by the judge is being appealed by Caesars, but the request that would have expedited that process was denied this week. Caesars wants the ruling overturned, and according to them the lawsuits could thrust the parent company into bankruptcy as well.
Caesars Entertainment is a massive company that’s split into multiple divisions. For now, Caesars Palace is the company’s only Las Vegas property included in the bankruptcy. Caesars’ other properties on the Strip, the Flamingo, the Paris and the Linq hotel were not included, but that could change. Other properties Caesars operates that were included are Harrah’s Reno, Harrah’s Lake Tahoe, Harveys Lake Tahoe, Caesars Atlantic City and Bally’s Atlantic City.
Legal fees have skyrocketed for the case, the suit against Caesars has amassed approximately $47 million including professional fees and expenses from an approximate four month period, according to the Associated Press. Initially, a conclusion to the bankruptcy litigation was expected by Caesars by February 8, but according to Bloomberg, the new plan estimates an outcome sometime next year in July.