The Caesars Entertainment Operating Company’s bankruptcy ended the payment of junior creditors and 63 former employees’ pensions.
US.- The latest chapter of bankruptcy filing investigation on Caesar’s Entertainment Operating Company revealed that the major casino operator may pay US$5.1 billion in damages for corporate deals. The claims include fraudulent transfers and violation of fiduciary breaches against the directors of the CEOC. That is the conclusion published yesterday after the law firm, headed by Richard Davis –Watergate prosecutor–, had thrown the first results of the investigation, which started a year ago.
The lawyers team concluded that Caesars, administered by Apollo Global Management and TPG Capital, transferred profitable assets to other divisions to avoid the payment to creditors. The investigation had free rein to analyse the company’s motion after it lost a bid to limit the scope of examination of the transfers. Davis was trying to probe the company sold major properties (the LINQ Hotel & Casino in Las Vegas) to fail the payment of millionaire debts. “The simple answer to this question is ‘yes’,” he ratified in the summary.
Aware of the conclusion, Caesars responded: “This is ultimately a dispute about valuation, process and whether CEOC was solvent at the time of each of the transactions. We disagree with the Examiner’s subjective conclusions and opinions on these financial issues. Indeed, the Examiner’s conclusions are completely inconsistent with the careful analysis and considered opinions of the independent and highly regarded investment banks and law firms who advised on these processes. The most significant transactions were negotiated and overseen by committees of independent directors of Caesars Entertainment and its affiliates.” In addition, CEOC will try to set a meeting with creditors, lead by Appaloosa Management, to arrange a plan of reorganisation.
Furthermore, the investigation suggests that the company has been insolvent since 2008 and in 2012, its administrators –Apollo and TPG– carried out strategies to prevent the damages in their companies. Now plaintiffs creditors are examining the next steps to continue the legal battle.