Creditors of Caesars Entertainment Corp.’s casino business are heading to court on Monday to argue that the company has been bankrupt for three days longer than it acknowledges, and $468 million hangs on the outcome, Reuters reported yesterday. The battle stems from how the casino operator wound up in bankruptcy in the first place. Creditors hope to convince U.S. Bankruptcy Judge Benjamin Goldgar in Chicago that the process began on Jan. 12 in Delaware. That was the day that Appaloosa and two other hedge funds filed an involuntary bankruptcy petition against the company. Three days later, the operating unit of Caesars, which was formed by the 2008 buyout of Harrah's Entertainment, filed its own Chapter 11 in Chicago, and the Delaware judge transferred his case to Goldgar. The law allows creditors to attack certain transactions dated within 90 days before a bankruptcy filing so they can claw back cash. If the judge considers the Jan. 12 bankruptcy date valid, unsecured creditors could challenge an October deal granting Caesars' senior creditors a lien on $468 million in cash.
