Caesars Casino Bankruptcy Stopped by Delaware Judge
The main operating arm of Caesars Entertainment Corp., the largest casino chain in the U.S., has filed for Chapter 11 bankruptcy in Chicago in hopes of wiping away $10 billion in debt. A Delaware judge, however, put the bankruptcy on hold within days of the filing.
Caesars claims that it has full support from its senior noteholders in the filing, declaring that they hope their current debt of $18.4 billion down to $8.6 billion with the bankruptcy. They filed overnight in the Chicago U.S. Bankruptcy court.
Appaloosa Management hedge fund, however, led the junior noteholders against Caesars by filing an involuntary bankruptcy petition in Delaware in order to put the Chicago proceedings on hold. They argued that their demands should take precedence, and that the bankruptcy should play out in Delaware.
Their reasoning: according to the junior noteholders, there have been no deals with the first-lien noteholder, the second-lien noteholders, or the unsecured creditors. The only ones who stand to profit from the bankruptcy, they believe, are the senior noteholders, and that their backing had been bought with “impermissible payments.”
The junior noteholders wish to have the bankruptcy moved to Delaware because the Chicago court would be more favorable to giving the debtors a shield against non-parties.
The bankruptcy has been put on hold until the two parties argue in the Delaware court whether or not the involuntary petition in permissible.
If you are considering filing for bankruptcy, the best first step you can take would be to find a professional bankruptcy attorney. If you are filing for your personal business, the need for an attorney grows that much greater. While it’s possible to try and handle bankruptcy on your own, having an attorney means you know the filings will be done correctly and on time.
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