Caesars Entertainment Corp. seeks to challenge a court ruling it claims would halt out-of-court debt restructurings while defending its decision to abandon a bond repayment pledge, Bloomberg News reported yesterday. The casino owner, which is fighting to avoid being forced into bankruptcy alongside its main operating unit, wants to immediately appeal a judge’s finding that companies cannot impose changes to bond terms that leave creditors with no way to collect. Caesars claims that the judge set too high a standard for out-of-court restructurings. The bid by Caesars stems from a lawsuit winding its way through New York federal court. In it, bondholders claim Caesars violated the federal Trust Indenture Act by abandoning a repayment pledge as part of a restructuring. Caesars argued that its contract with bondholders allowed it to scrap a promise to guarantee payment on $7 billion in debt under certain circumstances. U.S. District Judge Shira Scheindlin in Manhattan said she needs more evidence before deciding whether Caesars broke the law.
