Caesars Entertainment Corp was forced to file for Chapter 11 bankruptcy after its bad debts skyrocketed and the corporation was no long confident of being able to revive its fleet of casinos from a revenue slump. Caesars Entertainment Corp filed for bankruptcy in Chicago on the 15th of Jan 2015 and on the same day also sent a letter to 50 retired Caesar’s employees and informed them that the corporation would no longer be able to make payments based on the Supplemental Employee Retirement Plan (SERP).
These long serving employees were caught off guard and all they got from Caesars was an apology letter informing them that their payments would resume if and only when a bankruptcy court approved of the same. Now, the National Retirement Fund (NRF) confirmed that it has decided to remove 3 Atlantic City casinos which are owned by Caesars Entertainment from multi-employer pension plan.
The NRF is responsible for managing all pension plans for the casino, resort, laundry and apparel industries of Caesars. The NRF decided to remove Caesars, Harrah’s and Bally’s Atlantic City casinos and has insisted for a withdrawal liability of $462 million.
In a statement, NRF Chairman Jim Brubaker said “We did not start this. Caesars started this, and had Caesars not done what they were going to do, and did do, we would never have taken those actions. The ongoing bankruptcy is going to divide the company and the ownership group. When that happens, we no longer have the ability to pursue the other parts of Caesars — the so-called good Caesars — for the obligations of the bad Caesars. So we had to act before the bankruptcy.”
Stuck between Caesars Entertainment Corp and the NRF are the casino employees who are confused and shocked. President Bob McDevitt who heads Atlantic City casino workers union expressed his disappointment at what was going on and said the NRF was not thinking things through. McDevitt along with ten other trustees from the union have filed a lawsuit against the NRF for expelling the three casinos and termed NRF’s move as “unnecessary, premature, and irrational”.