The bankrupt main operating unit of Caesars Entertainment Corp. has asked that an outsider be summoned to probe alleged insider-led looting of the gambling operation, a request slated for court review next week, the Wall Street Journal reported today. The call for a probe of its own affairs was an unusual, perhaps unprecedented move by the Las Vegas casino operating unit, which was being pursued through the courts of two states by angry investors ever since it filed for chapter 11 protection Jan. 15. It provoked an even more unusual, perhaps unprecedented response by the trustee for bondholders owed $479 million. Forget about an examiner for now, and just let creditors with money riding on Caesars’ bankruptcy conduct their own investigations, said Wilmington Trust, trustee for investors in senior unsecured notes. Caesars “requested an examination of the challenged transactions, not to find out what they did or what they should do now to remedy their wrongs, but rather to forestall creditor investigations and access to documents,” lawyers for the bond trustee wrote.
