Caesars Entertainment Operating Company is looking to have four creditor lawsuits against parent company Caesars Entertainment halted.
While lawsuits against CEOC are automatically put on hold while in bankruptcy, CEOC argues that suits against Caesars Entertainment are still active and could put its ability to reorganise in peril, the Wall Street Journal reported.
The $1.5bn Caesars Entertainment has pledged as part of CEOC’s restructuring could be tied up in the lawsuits if they aren’t put on hold, the company said.
Also, both Caesars Entertainment and CEOC share an insurance policy, which would be depleted to pay for the defence costs against the lawsuits, CEOC pointed out.
The subject of the lawsuits is the transfer of four profitable casino properties from CEOC to Caesars Acquisitions last year, which some junior creditors argue was done as a way to create a good company and a bad company at their expense.
Caesars Entertainment contends the sales were done properly and as a way to improve CEOC’s debt load. An independent examiner has been ordered to review the transactions, a move which Caesars Entertainment has said it welcomes.
CEOC’s reorganisation will see it emerge as a REIT and reduce debt from $18.4bn to $8.6bn.
Source: Fantini’s GamingReport
