{"id":42176,"date":"2016-11-22T19:00:10","date_gmt":"2016-11-23T03:00:10","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=42176"},"modified":"2016-11-22T18:03:28","modified_gmt":"2016-11-23T02:03:28","slug":"bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/","title":{"rendered":"Bankruptcy Watchdog Looks to Thwart Caesars\u2019 Reorganization Plan"},"content":{"rendered":"
\"Caesars
The US Trustee\u2019s concerns about Caesars\u2019 bankruptcy reorganization plan could spell real trouble for the casino group and its private equity backers. (Image: Caesars Entertainment Corp)<\/figcaption><\/figure>\n

Caesars\u2019 nearly two-year battle to extricate itself from bankruptcy proceedings and reorganize the industry-high debt of its main operating unit, CEOC, could be in serious jeopardy, just as the end appeared to be in sight.<\/p>\n

While CEOC\u2019s various creditors have now all agreed to a reorganization plan, after 23 months of bitter legal squabbles, the US Trustee this week lodged an official objection to the plan.<\/p>\n

US Trustee is the watchdog that oversees the administration of bankruptcy cases; its problem with this one is that it offers \u201cblanket immunity\u201d to Caesars\u2019 private equity backers, Apollo and TPG. \u00a0 \u00a0<\/span><\/p>\n

Apollo and TPG formed Caesars through the $30.1 billion leveraged takeover of Harrah’s Entertainment in 2008, just before the recession bit hard into the casino industry, leaving it with $18 billion in debt.<\/p>\n

Serious Allegations<\/b><\/h2>\n

Caesars sought bankruptcy for CEOC<\/a> in an attempt to reorganize that debt down to about $10 billion but its junior bondholders believed they were getting a bum deal. Many sued Caesars in an attempt to hold the casino giant to guarantees of CEOC\u2019s debts.<\/p>\n

\n

They accused Caesars of stripping the unit of its most valuable assets for the benefit of Apollo and TPG, leaving it with nothing but distressed assets and unpayable debts.<\/strong><\/p>\n<\/blockquote>\n

A court-appointed examiner\u2019s report, spearheaded by Watergate prosecutor Richard Davis, essentially agreed with this assertion. After pouring over 80 million pages of Caesars\u2019 records, Davis\u2019 team concluded that CEOC was indeed picked clean of its prize properties.<\/p>\n

The report claimed that in 2012 Apollo and TPG began a strategy to weaken CEOC and strengthen their own hand in the preparation for potential bankruptcy proceedings, a claim that exposes the hedge funds to possible allegations of fraud.<\/p>\n

But in the meantime, the warring parties have reached agreement after Caesars agreed to sweeten the pot for the junior creditors, by $5 billion.<\/p>\n

Last month, the final hold out creditor came on board with the plan, which includes a condition that the company be released from allegations of asset stripping and resulting billions of dollars in legal claims.<\/p>\n

US Trustee Files Objection<\/b><\/h2>\n

But not so fast, says the US Trustee. On Monday it filed an objection to the releases on the grounds that they offered exculpation of “a wide array of parties for acts far beyond the plan or the Chapter 11 cases,” according to Reuters.<\/p>\n

The watchdog also said the legal releases were too broad for shielding against willful misconduct or actual fraud.<\/p>\n

This could spell trouble for Apollo and TPG, and trouble, too, for the Caesars<\/a> brand. Should the company ultimately be charged with the alleged asset-stripping it could be liable for billions in fines and damages, which would not only disrupt CEOC\u2019s bankruptcy but pull the whole group down with it.<\/p>\n

A trial to confirm the bankruptcy is due to take place in January.\u00a0\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Caesars\u2019 nearly two-year battle to extricate itself from bankruptcy proceedings and reorganize the industry-high debt of its main operating unit, CEOC, could be in serious jeopardy, just as the end appeared to be in sight. While CEOC\u2019s various creditors have now all agreed to a reorganization plan, after 23 months of bitter legal squabbles, the […]<\/p>\n","protected":false},"author":42,"featured_media":42177,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,18],"tags":[],"acf":[],"yoast_head":"\nBankruptcy Watchdog Looks to Thwart Caesars\u2019 Reorganization Plan<\/title>\n<meta name=\"description\" content=\"Caesars bankruptcy could be derailed by an objection from the US Trustee.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bankruptcy Watchdog Looks to Thwart Caesars\u2019 Reorganization Plan\" \/>\n<meta property=\"og:description\" content=\"Caesars bankruptcy could be derailed by an objection from the US Trustee.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2016-11-23T03:00:10+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2016-11-23T02:03:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2016\/11\/Caesars-Entertainment.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"640\" \/>\n\t<meta property=\"og:image:height\" content=\"360\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Casino.org Staff Writer\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Casino.org Staff Writer\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/\",\"url\":\"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/\",\"name\":\"Bankruptcy Watchdog Looks to Thwart Caesars\u2019 Reorganization Plan\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2016\/11\/Caesars-Entertainment.jpg\",\"datePublished\":\"2016-11-23T03:00:10+00:00\",\"dateModified\":\"2016-11-23T02:03:28+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/8c48bf89dc86da77b4d856c7b3b78d77\"},\"description\":\"Caesars bankruptcy could be derailed by an objection from the US Trustee.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/bankruptcy-watchdog-looks-thwart-caesars-reorganization-plan\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2016\/11\/Caesars-Entertainment.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2016\/11\/Caesars-Entertainment.jpg\",\"width\":640,\"height\":360,\"caption\":\"The US Trustee\u2019s concerns about Caesars\u2019 bankruptcy reorganization plan could spell real trouble for the casino group and its private equity backers. 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