It operates in four segments: Caesars Entertainment Resort Properties, Caesars Growth Partners Casino Properties and Developments, Caesars Interactive Entertainment, and Caesars Entertainment Operating Company.
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Caesars is hoping the judge will dismiss the lawsuits, because that could save the rest of the company from sinking into bankruptcy as well.
A U.S. Bankruptcy Court judge in Chicago is expected to rule Wednesday whether Caesars is shielded from the litigation.
The deal Caesars is seeking to complete with the Paulson group is intended to show enough progress to sway Judge A. Benjamin Goldgar, who’s hearing the Chapter 11 case, the person with knowledge of the matter said, asking not to be identified because the discussions are private.
Caesars said on Monday that it’s trying to make a deal with creditors by offering them up to $400 million, which only a tiny fraction of the $10 billion in debt it is trying to erase through bankruptcy.
Monday’s announcement reiterated that the proposed transactions would reduce CEOC’s debt by approximately US$10 billion, providing for the exchange of approximately US$18.4 billion of outstanding debt for US$8.6 billion of new debt.
While that’s less than the two-thirds majority it needs to consummate a restructuring plan in court, it’s giving the company the clearest path yet to reaching that point and resolving one of the last cleanups of the debt boom that triggered the 2008 financial crisis.
An official court committee representing second-lien bondholders said in a statement that while its members “will continue to explore all options for maximizing value” they won’t “support a plan that is coercive to its constituency and premised upon improper payments”.
A Bloomberg update pegs the total size of the group agreeing to the revised Caesars plan at about 30% of the overall second-lien group, by ownership volume.
Caesars had alleged in an August 2014 lawsuit that the second-lien noteholders harmed the company through bogus allegations and demand letters.
So what: Caesars management says that a “significant amount of CEOC’s second-lien notes” have greed to a new restructuring plan.
Meanwhile, Caesars and Apollo, which has led much of the restructuring, are hedging their bets. Bloomberg analyst Julia Winters, commenting on the new proposal, said, “From the second-lien perspective, anything is better”, a reference to how bad the original deal was from those debtholder’s perspective. The company’s stock price rose as much as 27 percent on the Nasdaq on Tuesday, before settling back.
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Finding a way out from under its mountain of debt is mandatory for the long-term survival of Caesars, with its overall restructuring and CEOC-unit bankruptcy key elements of the company’s plan. That includes Appaloosa Management, whose units held nearly $900 million of debt as of February, according to court records. According to a court filing, Caesars offered to withdraw the lawsuit, although it wanted to leave open the possibility of refiling it, which prompted the second-lien bond holders to seek a dismissal.
