Caesars Entertainment Corporation is appealing a ruling by U.S. Bankruptcy Judge A. Benjamin Goldgar that contributions to the National Retirement Fund, which manages its pension payments, may be suspended during Chapter 11 bankruptcy proceedings, as are other creditor payments.
Caesars has been the largest contributor to the fund, which manages pensions for 400,000 unionized workers in various industries, paying $13 million a year until suspending payments after its largest operating unit, Caesars Entertainment Operating Company (CEOC), filed for Chapter 11 bankruptcy protection last January. Managers of the fund are seeking to oust Caesars, putting the operator on the hook for nearly $364 million in pension costs plus a penalty for leaving the fund early.
Goldgar denied Caesars’ motion to extend the automatic bankruptcy stay on the pension payments on November 12. Caesars filed its appeal last week. Caesars attorneys claim the extra expense will jeopardize payments to senior creditors under its proposed reorganization plan for CEOC, which would trim the unit’s debt from more than $18 billion to around $8 billion.
The National Retirement Fund trustees voted to expel five CEOC properties—Bally’s, Caesars and Harrah’s in Atlantic City, Harrah’s Philadelphia and Parball Corp.—after creditors unsuccessfully attempted to force parent Caesars Entertainment into involuntary bankruptcy, a few days before the CEOC filed for Chapter 11 protection January 15. That bankruptcy timing is still being argued before the court.
