U.S. Bankruptcy Judge A. Benjamin Goldgar has appointed retired U.S. Judge Joseph Farnan as mediator in the Chapter 11 bankruptcy case of Caesars Entertainment Operating Company (CEOC), the largest operating unit of Caesars Entertainment.
Farnan will be responsible for mediating a final bankruptcy reorganization plan for CEOC on the heels of the pending release of an independent investigative report on disputed transactions that preceded the reorganization plan.
Creditors have accused Caesars of illegally transferring valuable assets out of the unit before the bankruptcy for the benefit of private equity owners Apollo Global Management and TPG Capital Management, shielding more valuable assets from lower-level creditors owed around $7 billion. Goldgar ordered the independent study after temporarily halting creditor lawsuits over the same transactions.
The reorganization plan, negotiated between Caesars Entertainment and top bondholders last year, would trim $10 billion from the $18 billion in debt carried by CEOC. Those first lienholders have since requested to submit their own reorganization plan.
Should the report, expected as soon as this week, determine that the asset transfers were illegal, Goldgar could throw out the negotiated agreement and open the case to other plans, including one that would entail all assets of the parent company, throwing Caesars Entertainment itself into bankruptcy.
Appaloosa and other junior creditors have sued Caesars in different courts. The most advanced case, in federal court in Manhattan, has been stayed until 60 days after the release of the independent report.
CEOC will provide an updated restructuring plan by March 23 and hopes to exit bankruptcy by Sept. 15.
In other Caesars news, state gaming regulators in Nevada have recommended approval of the gaming license of Mark Frissora, the CEO of Caesars Entertainment who took over last year for Gary Loveman. Frissora, a former CEO of Hertz, was named CEO designee and a member of the board of directors in February 2015 and spent four months working with Loveman on the transition.
And Caesars Entertainment continued a company-wide improvement of rooms and amenities with new projects announced.
Caesars is upgrading 5,700 rooms at Caesars Palace, Planet Hollywood Resort & Casino, Paris Las Vegas, and Harrah’s Las Vegas, plus Caesars Atlantic City, Harrah’s Gulf Coast in Biloxi and at the Horseshoe Tunica in Robinsonville, Mississippi.
“We are re-investing in our room product to ensure that our guests’ in-room experience perfectly aligns with the extraordinary entertainment offerings we have developed and upgraded in recent years,” Caesars Entertainment President and CEO Mark Frissora said in a written statement.
Caesars’ will renovate 4,800 rooms in Las Vegas, representing 20 percent of rooms at its Las Vegas hotels, and 15 percent of its rooms company-wide via the other 900 rooms.
Among planned improvements are modern designs, improved electronics, 50-inch TVs, new furnishings, and refurbished bathrooms.
Caesars also raised its resorts fees at five properties in Las Vegas. The fee now is $32 per room per day at Caesars Palace, Nobu, Cromwell, Paris, and Planet Hollywood. The fee remains $29 at all other Caesars properties in Las Vegas.
Caesars announced the March opening of the Montecristo Cigar Bar at Caesars Palace, which provides a 4,000-square-foot smoking parlor and choice cigars, whiskeys, and appetizers.
The cigar bar and lounge has seating for 100, a gaming area, and video wall capable of showing up to nine sporting events.
A climate-controlled humidor contains up to 1,000 of the finest cigars available by premium brands, including namesake Montecristo, Romeo Y Julieta, H. Upmann, Padron, La Flor Dominicana, Arturo Fuente, Ashton, San Cristobal, La Aroma de Cuba, Mi Amor, Las Antilles, and My Father.
