As former Hertz chief Mark Frissora officially took his position last week as chief executive officer of Caesars Entertainment, the bankruptcy restructuring still being managed by 12-year CEO Gary Loveman, who remains the operator’s chairman, entered new territory.
Frissora joined Caesars in February as a board member, and to prepare for the CEO role. “Mark has quickly assumed leadership of the company, and has spent his early months at Caesars working closely with the senior team and pursuing opportunities to increase productivity,” said Marc Rowan, founder of Caesars equity owner Apollo Global Management. Apollo and TPG Capital bought out the majority of Caesars’ shares in a 2008 private-equity acquisition.
“Since joining the company in February,” said Frissora, “I have visited most of our domestic properties, met with all of the company’s senior leaders and focused my attention on identifying new opportunities to drive growth and efficiency, which will ultimately create shareholder value.
“I am excited about the opportunities ahead and to become part of such a dynamic company and industry. Caesars has a diverse collection of assets, a highly engaged management team and employee base and strong loyalty among its customers. I am working with the leadership team and the board to formulate a multi-year growth strategy for the company.”
Frissora was chairman and CEO of Hertz for seven years, during which time he led the acquisition of Dollar Thrifty Automotive Group in a consolidation of the rental-care industry. He will earn $1.8 million a year in salary as CEO of Caesars, plus bonus pay up to 150 percent of his base salary.
Meanwhile, Loveman continues to oversee the bankruptcy case of Caesars’ largest unit, Caesars Entertainment Operating Company (CEOC). Last week, the operator asked U.S. Bankruptcy Judge Benjamin Goldgar to expand the scope of the scrutiny being applied by a court-appointed investigator looking into transactions that led to a restructuring deal being submitted by the operator.
Several lawsuits claim that the moves of Apollo and TPG prior to the bankruptcy to transfer assets out of CEOC and into a real-estate investment trust were illegal, and performed solely to protect the parents’ equity in those assets by placing them out of reach of creditors. Goldgar has directed the investigator to probe those allegations and determine whether those assets—on which a restructuring plan rests that could cut $10 billion out of CEOC’s debt load—were illegal.
CEOC last week asked the judge to expand the investigator’s probe to include the 2008 $30 billion leveraged buyout of Caesars Entertainment by Apollo and TPG, which was the main factor creating the industry-high debt of more than $22 billion that has stifled Caesars’ earnings and led to the bankruptcy.
The examiner’s conclusions, the company said in its request, “will be particularly helpful in assisting the parties in plan negotiations.”
