Mediation Breaks Down in Caesars Entertainment Bankruptcy Case
Wednesday, June, 29, 2016
Caesars Entertainment Corporation recently requested a US bankruptcy judge to block creditors from pursuing litigation. This occurred during talks to resolve the case that eventually broke down. Those familiar with the case now believe the possibility of reaching a mutual agreement is slim. The mediator working with the case said the restructuring talks between Caesars and junior creditors are now at a deadlock.
According to the mediator, there is still an issue with who gets what “part of the pie.”
The mediator is a retired US bankruptcy judge who now teaches at Northwestern University. He was placed as the mediator shortly after Caesars filed for bankruptcy protection in the beginning of 2015. The company currently has $18 billion of debt.
Caesars’ parent company offered $4 billion to help the casino emerge from Chapter 11, but that plan was opposed by the creditors, who went to accuse Caesars of looting its best assets before filing for bankruptcy. Junior creditors state they have claims worth up to $12 billion, which Caesars denies.
Caesars’ parent company is also facing New York and Delaware lawsuits filed by hedge fund bondholders concerning $11.4 billion in debt. Caesars calls the lawsuits without merit and are concerned rulings against the parent company could affect the bankruptcy exit plain. The company recently appointed a retired bankruptcy judge to chief restructuring officer.
A hearing will be held to potentially halt the New York and Delaware cases. That hearing will come a day after a hearing on the bankrupt unit’s disclosure statement