Caesars Entertainment Corp. and representatives of its largest creditor groups were able to stuck a deal to fund a reorganisation of the group’s bankrupt operating unit.
US.- Caesars Entertainment Corp. and representatives of its largest creditor groups closed a deal to fund a reorganisation of the casino giant’s bankrupt operating unit, a major step toward ending two years of court battles that embroiled the company and its controlling shareholders, Apollo Global Management LLC and TPG Capital.
The agreement announced slashes the stake of Apollo and TPG in the reorganised company whilst insulating the private equity firms and their top executives from bondholder-backed lawsuits seeking to hold them responsible for the bankruptcy of Caesars Entertainment Operating Co. The agreement, which requires a judge’s approval, would end those court fights and reorganise Caesars’s non-bankrupt parent company and the operating unit.
The deal must be incorporated into the reorganisation plan for the operating company, which is scheduled to go before U.S. Bankruptcy Judge Benjamin Goldgar in Chicago in January. In the event he approve the reorganisation, the Las Vegas-based casino giant would emerge with lower debt and new owners.
According to the statement, second-lien bondholders, owed about US$5.5 billion, appeared to be the biggest winners in the agreement. Those investors, led by David Tepper’s Appaloosa Management, will see a recovery rate of about 66 cents on the dollar, or about 27 cents more than under a previous plan.