CHICAGO (CelebrityAccess) — The operating unit of Caesars Entertainment Corp, the largest casino operator in the U.S., filed for Chapter 11 bankruptcy in a Chicago court on Thursday, seeking to restructure the company and shed $8.4 billion of debt. However, the process was put on hold by a Delaware judge after junior creditors sought to force an involuntary bankruptcy in a Delaware court at the same time.
Caesar's management says they have struck a deal with 80% of the first lien bondholders on a restructuring plan for the company that would see Caesars split into a casino operator and a real estate investment trust, but junior bondholders contend that the company sheltered valuable assets such as Planet Hollywood in subsidiaries before Caesars Entertainment filed for bankruptcy.
Led by hedge fund Appaloosa Management, the junior bondholders successfully petitioned a judge to put a halt to the proceedings in Chicago, however the Delaware judge Kevin Gross, did clear the way for routine filings that will ensure employees continue to be paid.
Caesar's struggle with debt is connected to their acquisition in a $30bn leveraged buyout in 2008 by two private equity firms — TPG and Apollo Global Management. Since then, the company has not generated a profit and has accumulated a staggering debt load of more than $18.4 billion.
Caesars said that operations at all of their properties will continue while the bankruptcy proceedings are underway. Said properties include franchises such as Harrah's, Horseshoe, and Bally's as well as hotel/casinos such as The Cromwell and the Linq and Planet Hollywood in Las Vegas. – Staff Writers