The committee of unsecured creditors empaneled in the Chapter 11 bankruptcy case of Caesars Entertainment Operating Company (CEOC) has appealed Bankruptcy Judge Benjamin Goldgar’s ruling to hear Caesars’ January 15 voluntary bankruptcy petition instead of an involuntary petition filed three days earlier by lower-level creditors.
Second-tier creditors say the voluntary petition is based on a deal reached between CEOC and its first-lien noteholders that leaves them holding the bag for $468 million in debt, while returning most of the senior creditors’ investment. In a lawsuit, the creditors claim the restructuring deal was made possible by illegal transfers of valuable assets out of CEOC and into a real-estate investment trust. The deal would cut CEOC’s debt from $18 billion to around $8 billion.
The involuntary petition would cover all loans made to the parent company, Caesars Entertainment, which is owned by private equity funds Apollo Global Management and TPG Capital Management. Caesars’ petition covers only CEOC properties, while placing non-bankrupt affiliates in the REIT out of creditors’ reach.
Meanwhile, UNLV law professor Nancy Rapoport has been appointed to lead a committee that reviews bills for legal work as well as other professional fees and expenses tied to the Caesars bankruptcy proceedings.
