Caesars Entertainment Corporation has hired former U.S. Bankruptcy Court Judge Robert Gerber as chief restructuring officer. Gerber will take over negotiations with creditors of Caesars’ largest operating unit, Caesars Entertainment Operating Company (CEOC), as the unit struggles to come to an agreement on a restructuring plan in its ongoing Chapter 11 bankruptcy case.
Gerber, who was a judge in the General Motors bankruptcy case, will be responsible for recharging CEOC’s negotiations with creditors who have thus far rejected the operator’s restructuring agreement negotiated with first-lien bondholders in late 2014.
The operator has been unable to secure the approval of enough of the lower-level creditors for U.S. Bankruptcy Judge Benjamin Goldgar to approve the restructuring plan, which relies on asset transfers moving valuable properties from CEOC prior to its January 2015 bankruptcy filing.
Those transfers are being assailed as improper in several lawsuits against the operator, and last month, an independent court-appointed examiner agreed with the plaintiffs of the lawsuits in determining the transfers to be improper.
Meanwhile, Bloomberg reports that Caesars Entertainment is running out of cash to pay legal fees that have topped $345 million thus far.
Caesars board member Fred Kleisner, who chairs the parent company’s negotiating committee, issued a statement indicating the company remains far from a settlement agreement with its creditors on a deal that would restructure CEOC’s $18 billion in debt. An independent examiner last month sided with the lower-level creditors in assailing
“Despite a proposal that would provide CEOC and its creditors with value that Caesars Entertainment believes would be more than sufficient to address the findings of the examiner, as well as settle the ongoing guarantee litigation pending against the company, there remains disagreement between the parties, over how to quantify and allocate this value,” Kleisner said.
