In a press relief noted for its brevity compared to the gravity lifted, Caesars Entertainment Corporation (NASDAQ: CZR) has seen its operating company’s bankruptcy reorganization plan finally approved allowing the company to shed some $10 billion in debt and put an end to its $18.4 billion bankruptcy.
After approving the plan, U.S. Bankruptcy Judge Benjamin Goldgar declared it a “monumental achievement,” according to a Reuters report on the Chicago hearing.
Caesars Entertainment Corporation and its Chapter 11 debtor subsidiaries said in a press release Tuesday that the U.S. Bankruptcy Court for the Northern District of Illinois has confirmed the Debtors’ Plan of Reorganization, paving the way to conclude CEOC’s court-supervised restructuring process during this calendar year, ending a saga that entered the courts on January 15, 2015, and at times may have teetered on the brink of bringing the parent company into bankruptcy and Chapter 7 liquidation.
“The confirmation of the Plan of reorganization marks a major milestone in CEOC’s restructuring process and facilitates a path forward to emergence in 2017,” Mark Frissora, President and CEO of Caesars Entertainment said.
Gaming operations will be separated from real estate holdings under the plan with a new real estate investment trust (REIT) leasing the properties back to Caesars who will continue to own and operate gaming assets. Caesars Entertainment will not own any equity interest in the REIT, which will be owned by certain CEOC’s creditors, who were not identified in the press release.
Before the REIT can be spun off, Caesars Entertainment and Caesars Acquisition Company must complete their previously announced merger.
“Upon CEOC’s emergence, we will be positioned to strengthen our financial and operational performance by pursuing new opportunities to invest in and expand our brands and business,” said Frissora.
Although the plan remains subject to obtaining gaming regulatory approvals, the completion of the merger, certain financing transactions, and various other closing conditions, the court’s approval Tuesday virtually assures that Caesars will remain one of the preeminent gaming concerns in the world, and could mark a turning point that will see the company’s strategic expansion on the world stage – after missing the Macau boom, and having been hobbled with uncertainty for several years since the Great Recession and ensuing bankruptcy.
Caesars has a presence in five countries and operates casinos in 13 U.S. states, employing about 60,000 people across more than 30 casino properties. In addition to the Caesars name, other brands include Harrah’s and Horseshoe casinos.
“The new Caesars will be a stronger company with a healthy balance sheet, a plan for growth and investment, operating discipline and a relentless focus on employee and customer satisfaction,” Frissora said. “Upon CEOC’s emergence, we will be positioned to strengthen our financial and operational performance by pursuing new opportunities to invest in and expand our brands and business. While there is still much work ahead to complete this process, we are excited about the future of the Caesars enterprise.”
Over the two-year course of the bankruptcy hearings, U.S. District Judge Benjamin Goldgar dealt with as many as 200 lawyers from both sides.