Caesars Entertainment Corporation, which has been negotiating with a committee of junior bondholders on acceptance of a restructuring plan that will gain approval for the bankruptcy plan of its largest operating unit Caesars Entertainment Operating Company (CEOC), has reached an impasse in negotiations with the creditors, according to a Bloomberg report.
Caesars needs junior creditor approval of its restructuring plan for CEOC to avoid a bankruptcy for the parent company. According to the Bloomberg report, the bondholders are asking for around $2 billion more than Caesars has offered. Approval of the CEOC restructuring would eliminate around $10 billion of the company’s industry-high $24 billion in debt.
Meanwhile, the group of first-line creditors who approved the CEOC restructuring refused to extend the deadline for approval of that plan by the Chicago U.S. Bankruptcy Court, throwing the entire deal into question.
Should the company be unable to secure the approval of the first-lien creditors for an extension and secure approval of at least 50.1 percent of the junior creditors, Bankruptcy Court Judge Benjamin Goldgar could rule that the lower-level creditors’ petition for involuntary bankruptcy of the parent company can move forward.
