Appaloosa Investment and other junior creditors have filed in the bankruptcy court to pre-empt Caesars’ planned restructuring, Bloomberg reports.
They argued that Caesars insiders “plundered” Caesars Entertainment Operating Company by removing its most profitable assets while paying themselves hundreds of millions of dollars. That left the unit with massive debts that it cannot repay. The filing threatens the agreement Caesars has made with first lien note holders in which Caesars Entertainment Operating Company would become a publicly traded REIT; assets taken from it to form Caesars Growth Properties would be absorbed and debt would be cut from $18.4bn to $8.6bn.
Caesars has said that its proposed reorganisation would make all of its units cash flow positive.
