Caesars Entertainment Edges Closer to Restructuring Deal with Creditors
Harrahs Entertainment has inched nearer to placating its debtors, securing a $5 billion agreement with a majority of the lenders to its struggling subsidiary, Caesars Entertainment Operating Company (CEOC).
CEOC sought bankruptcy protection in January 2015, weighed down by $18 billion in liabilities. Caesars Entertainment and Caesars Acquisition Company had modified a consolidation contract in July 2016, intending to furnish restitution to the operating division’s creditors.
A significant source of dispute centered on claims from CEOC’s lenders that the corporation’s private investment supporters, Apollo Global Management and TPG Capital Management, had divested it of its holdings.
To circumvent a convoluted network of lawsuits, Apollo and TPG have consented to diminish their share in Caesars from 66% to 16%. This comes after an August judgment by US Bankruptcy Court Judge Benjamin Goldgar to not prolong an order that prohibited bondholders from pursuing legal action against Caesars over the cessation of bond assurances.
As per the amended bankruptcy strategy, lenders will possess 70% of the restructured Caesars, while Apollo and TPG will maintain a minority interest, shielded from the possibility of litigation.
The New York Times states that subordinate bondholders will now obtain a collection of cash, equity, and convertible securities valued at 66 cents on the dollar, increased from the 27 cents Caesars had initially proposed.
Counsel for a cohort of junior creditors expressed satisfaction with the advancements achieved, indicating optimism for an eventual resolution while acknowledging the remaining journey ahead.”
