Lower Ranking Creditors Seeking to Force Caesars Bankruptcy
Bloomberg reported that lower-ranking creditors of Caesars Entertainment moved to force the company’s main operating unit into bankruptcy in an attempt to block a plan they say protects the owners at their expense.
Bloomberg said, according to a bankruptcy court filing, Appaloosa Investment and funds affiliated with Oaktree Capital and Tennenbaum Capital asked a judge to appoint an examiner to investigate claims insiders “plundered” the unit.
According to court papers, Bloomberg notes that the lower-ranking creditors said, “These insider transactions stripped the debtor of most of its valuable income-generating assets and hundreds of millions of dollars of cash, leaving the debtor burdened with massive debt that cannot be repaid.”
In a separate news release, Caesars Entertainment said it has been negotiating with creditors for four months on a plan to put its biggest unit into bankruptcy as soon as this week and turn it into a real estate investment trust.
Caesars said in the statement it would offer a $150 million consent fee to bank lenders who signed on to its plan and agreed to release Caesars of a requirement that it guarantee the term loans of its largest subsidiary.
“We are pleased to have garnered broad-based support of our restructuring plan from more than two thirds of first lien bondholders, exceeding all required thresholds,” said Gary Loveman, chairman of Caesars Entertainment. “The type of leadership from our institutional creditor base enhances our ability to maximize value on their behalf. In response to inquiries from certain of our bank lenders, we have decided to seek their support to help facilitate a smooth and efficient restructuring, which is in the best interest of all stakeholders.”
To read the entire Bloomberg report, click here.
To read the Caesars Entertainment statement, click here.
Previously on abfjournal: Reuters: Caesars Restructuring Deadline Nears, December 30, 2014