Over 200 lawyers filled the courtroom to hear Judge Goldgar’s decision.
U.S. District Judge Benjamin Goldgar gave approval for Caesars Entertainment Operations Corp (CEOC) to reorganize, ending a 2-year dispute over Caesars Entertainment’s bankruptcy reorganization plan. Mark Frissora, the CEO of Caesars Entertainment, called the decision a “major milestone“.
Those familiar with the bankruptcy case are likely to agree. The fight over CEOC’s bankruptcy plan has been bitter over the past 24 months. At times, Caesars executives claimed the parent company might have to declare bankruptcy, if Judge Goldgar did not approve the plan.
Benjamin Goldgar’s Approval
A big part of the milestone is having Judge Goldgar’s approval. Caesars Entertainment expressed frustration and even despair at times, especially when Goldgar ruled that the parent company did not have protection from further lawsuits, if they lost the current case.
A second judge assigned to the case eventually resigned, claiming Goldgar’s interference was making it harder for him to negotiate a fair bargain between the two sides. That was in September 2016, a month after Goldgar’s ruling on Caesar Entertainment’s liability.
Caesars Entertainment’s List of Casinos
Mark Frissora promised a bright future for the Las Vegas casino company, which owns more properties than any other American-based casino enterprise. Caesars owns over 50 casinos spread over 13 different states. Its brands include Caesars Palace, Harrah’s, and Bally’s.
The company’s casinos are located throughout Nevada, New Jersey, Illinois, Indiana, and Pennsylvania. Twelve of those casinos were in the CEOC division, but were moved out of that division just 5 months before the bankruptcy filing. Junior creditors sued, because the reorganization plan left them with CEOC shares, but few assets.
Mark Frissora Statement on Caesars
Over the months, Caesars Entertainment upped its monetary offer to the junior creditors, hoping to buy their consent. Judge Goldgar put pressure on Caesars in a number of ways to meet the plaintiffs’ demands. The plan as it stands is going to remove about $10 billion of debt from the Caesars Entertainment docket, which should allow the parent company to avoid bankruptcy.
Mark Frissora said in a public statement, “The new Caesars will be a stronger company. While there is still much work ahead to complete this process, we are excited about the future of the Caesars enterprise.”
Huge Bankruptcy Case
The Caesars Entertainment Operations Company bankruptcy plan is one of the largest in gambling history. The court room in Chicago held over 200 lawyers for the creditors and Caesars. Benjamin Goldgar, who is no stranger to bankruptcy cases, said, “I have never seen so much paper in my life.”
The entire bankruptcy plan involved $18 billion in debt. In its entirety, Caesars Entertainment carries $23 billion in debt.
In the CEOC reorganization plan, the junior creditors continue to own stock in the operations division. The assets taken from CEOC won’t be returned, but the creditors are given billions of dollars in cash. Meanwhile, the first lienholders, who owned about 80% of CEOC’s debt, were given shares in a new real estate investment division. This part of the company would involve newer developments in the gambling and leisure industries.
