A number of US Congress members are urging the IRS to reject a big part of Caesars Entertainment Corps restructuring plan.
US.- Several US Congress members are calling on the IRS to stop a major part of Caesars Entertainment Corps restructuring plan. As many as 15 lawmakers sent a letter to the Treasure Secretary claiming that the casino operator shouldn’t be allowed to split up into more than one company as part of its US$18 billion restructuring plan.
Congress members reject the Real Estate Investment Trust (REIT) because Caesars would still own casinos, denoting the company will be able to shelter an extensive part of profits from the casinos and therefore acting as a tax-payer subsidy.
The lawmakers have also outlined that planned REIT’s makes it riskier for gaming companies to “avoid Federal Trade Commission market concentration concerns and state laws designed to ensure companies do not amass undue economic influence over local gaming markets.”
The real estate investment trust is one of the main phases of Caesars’ restructuring plan. It proposes to cut US$10 billion off of the books and creditors would accept ownership of the REIT for payment.
“The proposed financial restructuring of [the Caesars unit], including the formation of a REIT, is designed to significantly reduce debt at [the Caesars unit], preserving thousands of jobs across the Caesars network, and maximising recoveries to creditors,” said a spokesman for Caesars.