Caesars Entertainment Corp. has struck a deal to settle one of several pending bondholder lawsuits, a key step toward peace in the contentious bankruptcy case of the casino company's largest operating unit, Dow Jones Newswires reported yesterday. The settlement, which Caesars disclosed yesterday in a filing with the Securities and Exchange Commission, resolves a class-action lawsuit brought by the holders of unsecured bond debt issued by its Caesars Entertainment Operating Co. unit. Like other litigation pending against Caesars, the lawsuit sought to hold Caesars to guarantees of the bankrupt CEOC unit's debt. Under the settlement, which was reached on Monday, lead plaintiff Frederick Barton Danner agreed to drop the lawsuit in a New York federal court and to support CEOC's chapter 11 restructuring, which includes a broader settlement of potential legal claims against Caesars and its private-equity backers, Apollo Global Management and TPG. Read more.
In related news, Bankruptcy Judge Benjamin Goldgar suggested the casino operating unit of Caesars Entertainment Corp. (CEC) ask its parent's private equity sponsors for money to fund a plan to exit its contentious $18 billion bankruptcy, Reuters reported. Apollo Global Management LLC and TPG Capital Management LP formed the Caesars casino holding company in a 2008 buyout and the three groups are facing claims of fraud and asset stripping by creditors of the bankrupt unit. Caesars, Apollo and TPG have denied the claims. "Why should a successful reorganization depend on contribution from CEC alone?" Judge Goldgar asked at a monthly hearing in U.S. Bankruptcy Court in Chicago. The unit recently asked Judge Goldgar to extend a halt on billions of dollars in lawsuits over debt guarantees from several bondholders against the parent while it makes a last-ditch attempt to settle with holdout creditors. Read more.
