Caesars’ Operating Unit Files for Bankruptcy Exit Plan
Ceasar Entertainment Corp’s operating unit has recently filed its plans for a bankruptcy exit strategy by proposing to cut $10 billion in debt through its Chapter 11 bankruptcy.
The plan proposes to split the operating unit into two main entities. The first would be in charge of running 38 casinos in 14 states. The other would focus entirely on being a property company that owns the casinos’ real estate.
The senior creditors approved of the move, as it is simply a formalized version of a proposal that had been agreed upon before the company had even filed for bankruptcy. Through the proposal, the first-lien noteholders will be given ownership of the operating company when it exits bankruptcy in exchange for the $6.3 billion that they are currently owed. They will have ownership of 70% of the company, meanwhile the junior creditors would receive the other 30% in exchange for the $5.2 billion they are owed.
The junior creditors still have yet to say whether or not they approve of the move, as the filing has put their earlier lawsuits on hold. The creditors had initially filed against the parent company, claiming that it intentionally left the operating unit unable to pay its debts by looting it of its best casinos and properties.
Caesars Entertainment reported a $1 billion net loss for the last quarter of 2014, which is a reduction of the $1.76 net loss they reported in 2013.
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