The U.S. government's bankruptcy watchdog objected yesterday to a Caesars Entertainment Corp. subsidiary's proposal to exit chapter 11, threatening to derail a largely consensual plan to slash $10 billion of debt, Reuters reported. The Caesars subsidiary, Caesars Entertainment Operating Co. Inc. (CEOC), filed an $18 billion bankruptcy in January 2015 amid allegations by creditors that its private equity-backed parent had looted the unit of its best assets and stripped debt guarantees. Feuding parties made a peace deal in September that included a $5 billion contribution by Caesars to the unit's reorganization plan in exchange for releases from billions of dollars in potential legal claims. In a filing with the U.S. Bankruptcy Court in Chicago, the U.S. Trustee objected to the releases and the exculpation of "a wide array of parties for acts far beyond the plan or the Chapter 11 cases." The U.S. Trustee called the releases "blanket immunity." A report by an independent examiner in March said that Caesars and its private equity backers Apollo Global Management LLC and TPG Capital Management LP could be on the hook for up to $5.1 billion in damages for the alleged asset-stripping.
