The operating unit of Caesars Entertainment Corp begins an unusual two-day trial today to decide which of two bankruptcy courts will review its $10 billion debt-cutting plan, Reuters reported today. Caesars Entertainment Operating Co. Inc., which runs 38 casinos, finds itself in the rare situation of being in two bankruptcies in two different courts at the same time. A group of hedge fund creditors tried to force the company into bankruptcy in Wilmington, Del., earlier this month. The company responded by filing for bankruptcy in Chicago, and Monday's trial in Wilmington in front of Judge Kevin Gross will sort out where the case ends up.
In related news, Caesars Entertainment Corp., which has been gathering support for a plan backed by Leon Black’s Apollo Global Management LLC, was accused by bank lenders of trying to buy their votes and subverting bankruptcy law, Bloomberg News reported on Saturday. The lenders, including GSO Capital Partners LP, Silver Point Capital LP and BlackRock Financial Management Inc., asked a judge to bar the casino company from handing out fees to obtain votes, according to a court filing in Wilmington, Del. Friday. They own about $2.9 billion of Caesars’ most senior debt, they said. Detailing the “improper” offer, the lenders said that they were offered a $150 million fee to consent to the company’s proposed refinancing, along with opportunities to buy new convertible notes issued by the healthier parent company and take cash from the bankrupt company. In return, they said that they were asked to back a pact hammered out with supporting creditors outside of court and not yet filed as part of a chapter 11 case.
