A step back on Caesars bankruptcy

Caesars strategy to exit the financial situation is now jeopardised.

The US government bankruptcy watchdog rejected Caesars’ petition.

US.- The US government bankruptcy watchdog Trustee objected this week the Caesars Entertainment Operating Company (CEOC) reorganisation plan to finish the bankruptcy legal battle.  Caesars’ subsidiary had introduced a formal document to exit Chapter 11 receivership and reorganise the company.

Meanwhile Caesars will have to wait until January for the trial that may confirm the US$18 billion bankruptcy declared at the beginning of 2015. The bankruptcy chronic that started last year seemed to be reaching the final steps, but this week’s watchdog resolution may produce one more twist to the story.

In September, Caesars and the warring parties have reached an agreement after the CEOC owners, TPG and Apollo, offered to invest US$5 billion for the reorganisation plan, meaning to surrender their majority interest in the company. In exchange, they asked for releases from billions of dollars in potential liability claims. Nevertheless, U.S. Trustee objected to the releases by describing them as “blanket immunity.”

The Federal watchdog also objected the exculpation of “a wide array of parties for acts far beyond the plan or the Chapter 11 cases.” Caesars would be able to appeal to a higher Court in case the US bankruptcy watchdog Trustee denies the bankruptcy claim. The CEOC’s petition had also been objected by a minority of second-lien bondholders who assured they were receiving less than expected.