Junior creditors of Caesars Entertainment Corp. moved to force the main operating unit into bankruptcy in an attempt to block a plan to protect senior lenders at their expense, after contentious wrangling over the casino company’s future, Bloomberg News reported today. The involuntary chapter 11 filing today by Appaloosa Investment LP and other junior lenders in Delaware pre-empts Caesars’ own effort to put the unit under bankruptcy court protection and threatens to scuttle a deal between the company and senior creditors. Appaloosa asked the court to appoint an examiner to investigate claims that insiders “plundered” the unit, paying themselves hundreds of millions of dollars while moving assets out of the junior creditors’ reach. The filing by Appaloosa and other holders of second-priority senior secured notes in the unit follows months of negotiation and litigation between Las Vegas-bases Caesars and its creditors.
http://www.bloomberg.com/news/print/2015-01-12/appaloosa-files-to-put-c…
In related news, bondholders of Caesars Entertainment Corp. will continue their fraud lawsuit against the casino company controlled by Apollo Global Management LLC (APO) even after its operating unit’s planned bankruptcy filing around Jan. 15, Bloomberg News reported on Friday. Caesars was asking the judge to toss the lawsuit, saying that bankrupt companies are automatically protected from litigation. The bondholders, who accused Caesars and its directors from Apollo of “looting” assets from the insolvent unit that owes them money, said their claims against those parties aren’t affected by the rule. The Las Vegas-based company has made agreements with a few lenders to try to use bankruptcy court to cut about $10 billion of debt from the money-losing unit that runs the casinos by offering them fees and special payments, filings show. Those who sign up must agree to drop out of lawsuits, Caesars says in regulatory filings.
http://www.bloomberg.com/news/print/2015-01-09/caesars-bondholders-to-c…