Caesars Private Equity Backers Must Show their Bank Statements, Rules Bankruptcy Judge
Posted on: September 18, 2016, 10:13h.
Last updated on: October 12, 2016, 03:24h.

Caesars’ junior creditors have successfully forced the casino group’s controlling private equity backers to reveal details of their wealth. The request was granted on Wednesday by the judge presiding over the $18 billion dollar bankruptcy of Caesars’ main operating unit, Caesars Operating Entertainment Corp (CEOC).
“These folks are going to have to pony up the paper,” declared Judge Benjamin Goldgar at a hearing in Chicago.
Caesars is seeking to reorganize CEOC’s $18 billion debt load down to around $10 billion. But it has been locked in disagreement with its junior bondholders for almost two years, many of whom are suing to hold the casino giant to guarantees of CEOC’s debts.
Asset Stripping
They have also accused Caesars of stripping the unit of its most valuable assets for the benefit of its controlling creditors, Apollo Global Management and TPG, leaving it with nothing but distressed assets and unpayable debts. Apollo and TPG’s $30.1 billion leveraged takeover of the company, just before the recession bit hard into the casino industry and left it with an industry-high debt.
A court-appointed examiner’s report, spearheaded by Watergate prosecutor Richard Davis, concluded that CEOC was indeed picked clean of its prize properties. The report claimed that, in 2012, Apollo and TPG began a strategy to weaken CEOC and strengthen their own hand in the preparation for potential bankruptcy proceedings.
Parent Caesars Entertainment Corp (CEC) has pledged $4 billion towards CEOC’s reorganization plan, $3.5 billion more than it originally offered to contribute, but for the junior bondholders, it isn’t enough. They want individual directors to be held financially responsible for the mess.
Dirty Laundry
Billionaires Marc Rowan and David Bonderman, founders of Apollo and TPG, respectively, are two CEC directors who must reveal their financial details to the court in exchange for release from allegations of fraud.
“We disagree with the judge’s decision, which permits an unwarranted invasion into personal privacy and is contrary to well-established law,” Marc Kasowitz, a lawyer for TPG, told the Las Vegas Review-Journal via email.
Earlier this week, the mediator appointed by Caesars to help negotiate with the junior creditors, former federal judge Joseph J. Farnan Jr, resigned in protest at Goldgar’s demand for him to reveal more details of the talks, details that are traditionally understood to be confidential.
Goldgar last month decided not to renew the legal shield protecting CEOC from its creditors’ lawsuits, litigation threatens to plunge the whole company into bankruptcy.
Related News Articles
Pair Found Guilty in New Zealand Roulette Scam
Adelson Dealt Blow in “Foul-Mouthed” Libel Case
Arkansas Highway Commission Cautions Voters on Casino Ballot Question
Most Popular
Bally’s Chicago at Risk of Not Being Built, Says City Alderman Brian Hopkins
Virginia’s Bristol Casino Shutters Due to Equipment Failure
Bally’s Insiders Benefit from A’s Move, Bought Stock in Advance of MLB Vote
Las Vegas Karaoke Bar Sued to Tune of $264M for Skirting Royalties
Most Commented
-
F1 to Remove Tunnel Population Living Beneath Las Vegas Strip
November 14, 2023 — 28 Comments— -
Court Voids Nassau Coliseum Lease Transfer for Sands New York Casino Plan
November 10, 2023 — 9 Comments— -
Edwin Castro is Rightful Winner of $2.08B Powerball, Lawyer Says Video Proves
November 16, 2023 — 9 Comments— -
VEGAS MYTHS RE-BUSTED: The Old MGM Grand Was Imploded After the Fire
November 17, 2023 — 8 Comments— -
$2B Powerball ‘Pretender’ Could Face Police Charges, Official Says
October 26, 2023 — 6 Comments—
No comments yet