Judge delays ruling in Caesars reorganization
24 Jun 2015
By Howard Stutz
By Howard Stutz
Investors have worried an adverse ruling on when exactly Caesars Entertainment Operating Co. Inc. entered Chapter 11 could leave the casino company on the hook for more than $1 billion in debt obligations.
According to the Law 360 website, U.S. Bankruptcy Judge Benjamin Goldgar on Monday agreed to postpone the trial — which had been set for early August — to Oct. 5 after an attorney for junior noteholders said that his side needs additional time to complete discovery.
Caesars placed CEOC into a pre-packaged Chapter 11 bankruptcy in January.
Earlier this month, a hearing began in Chicago, where Caesars is seeking to halt litigation against the company that could derail the restructuring process. Creditors want to advance four separate lawsuits against Caesars over the transfer of assets to its operating unit.
Earlier this month, a federal judge in New York handed a small victory to creditors seeking to collect $750 million from CEOC, saying the trustee representing creditors can ask her to rule on parts of the lawsuit without first holding a trial.
A favorable ruling could force Caesars Entertainment into bankruptcy because of its liabilities.
Caesars Entertainment has a gaming industry high $22.8 billion in long-term debt, of which $18.4 billion is attached to CEOC. Through bankruptcy, the company hopes to eliminate almost $10 billion of the division’s debt and convert CEOC into a real state investment trust.
CEOC controls Caesars Palace, Caesars Atlantic City, Harrah’s Reno and more than a dozen regional properties.
Shares of Caesars closed at $6.46 on the Nasdaq on Tuesday, down 6 cents, or 0.92 percent.
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