Supplier News
US – Bankruptcy Court finally approves Caesars’ $18bn plan
By Phil - 18 January 2017
After a two-year court process, Caesars Entertainment Corp has been given approval for its $18bn bankruptcy plan.
The US Bankruptcy Court for the Northern District of Illinois has confirmed the Debtors’ Plan of Reorganisation paving the way to conclude CEOC’s court-supervised restructuring process in 2017.
Caesars’ subsidiary, Caesars Entertainment Operating Co (CEOC), has been allowed to shave off $10bn of debt as it separates its property assets from its gaming operations.
“It is a monumental achievement. I have never seen so much paper in my life,” US Bankruptcy Judge Benjamin Goldgar said at the confirmation hearing in Chicago.
“Upon CEOC’s emergence, we will be positioned to strengthen our financial and operational performance by pursuing new opportunities to invest in and expand our brands and business,” Mark Frissora, President and CEO of Caesars Entertainment, said.
Under the previously disclosed terms of the Plan, CEOC will emerge from bankruptcy, separating virtually all of its U.S. based real property assets from its gaming operations. Caesars Entertainment will continue to own and manage the gaming operations. The real property assets will be held in a newly created real estate investment trust (REIT) owned by certain of CEOC’s creditors. Caesars Entertainment will not own any equity interest in the REIT. In addition, in connection with CEOC’s emergence, Caesars Entertainment and Caesars Acquisition Company must complete their previously announced merger.
“The new Caesars will be a stronger company with a healthy balance sheet, a plan for growth and investment, operating discipline and a relentless focus on employee and customer satisfaction,” Mr. Frissora said. “While there is still much work ahead to complete this process, we are excited about the future of the Caesars enterprise. “The confirmation of the Plan of reorganization marks a major milestone in CEOC’s restructuring process and facilitates a path forward to emergence in 2017. We appreciate those that helped make this day possible for Caesars and are grateful for the ongoing support and commitment of our customers and vendors and for the continued hard work and dedication of our employees.”
Gaming Union analyst John DeCree said: “The biggest challenge is going to be getting the new structure under control.”
The US Trustee bankruptcy watchdog had expressed concerns over the ‘blanket immunity’ that the deal offered to Caesars’ controlling private equity backers, Apollo and TPG. They will retain a collective 16 per cent share in the new Caesars but they will not own any stake in the real estate investment trust that will contain Caesars’ property assets.
CEOC is expected to emerge from Chapter 11 bankruptcy later in 2017.
