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Caesars Entertainment Corp. won a short reprieve in its litigation with bondholders, once again hitting the pause button in its multibillion-dollar battle, the Wall Street Journal reported today. Judge Matthew Kennelly of the U.S. District Court for the Northern District of Illinois yesterday granted a motion that pushes back litigation in New York, which was slated to begin Tuesday afternoon, until Sept. 16. At issue is whether Caesars must honor more than $11 billion in guarantees for the debt of its bankrupt operating unit, Caesars Entertainment Operating Co. Last week, Bankruptcy Judge A. Benjamin Goldgar said that he wouldn’t renew the shield that protected Caesars from the lawsuits over whether it must honor the debt guarantees. Litigation was set to begin Tuesday on whether a $7.7 billion payment to bondholders would be made by Caesars. Meanwhile, another suit over $3.7 billion in debt guarantees was scheduled to be argued before a Delaware state court in September. CEOC has filed an appeal that will be heard by Judge Kennelly today.

A judge ruled that Caesars Entertainment Corp. must face bondholder lawsuits that could force it into bankruptcy alongside its main operating unit, Bloomberg News reported on Friday. The ruling by Bankruptcy Judge A. Benjamin Goldgar means Caesars could lose court cases by mid-September in New York and Delaware worth $11.4 billion. Judges in those states have scheduled court hearings to decide whether to rule immediately against the company, dismiss key parts of the suits, or send the cases to trial. The lawsuits are the biggest obstacle left to getting Caesars’s operating unit, Caesars Entertainment Operating Co., out of bankruptcy. Bondholders want to use the suits, which a court examiner found have a good chance of succeeding, to boost their recoveries above the 34 percent offered by the unit. Caesars bankruptcy lawyers vowed to appeal and asked the judge to halt the suits while a U.S. District Court judge reviews Goldgar’s decision. Judge Goldgar denied the request, which means CEOC must now seek an emergency order from a higher court overturning Goldgar’s ruling. Goldgar, who said that will be difficult, concluded that halting the lawsuits with an injunction wouldn’t help Caesars settle with bondholders.

Energy Future Holdings Corp., Texas' biggest power company, won bankruptcy court approval on Friday for a plan that will allow the bulk of its operations to exit chapter 11 after two years of battling creditors, Reuters reported. "I am going to overrule all of the remaining objections,” said Bankruptcy Judge Christopher Sontchi. Dallas-based Energy Future filed for bankruptcy in April 2014 when weak electricity prices left it unable to service $42 billion in debt, mostly related to the company's creation through a 2007 leveraged buyout. The reorganized company will own TXU Energy, the state's largest retail electric utility, and Luminant, Texas' largest power plant operator and largest coal miner. The spinoff of the two divisions into the new company avoids a tax liability that had worried creditors. The potential for a "massive" tax liability was the "elephant in the room," Judge Sontchi said on Friday, adding that he believed the plan "was the best possible deal" to push the company out of bankruptcy.

Valuation has become a contentious issue in the chapter 11 case of Horsehead Holding as some shareholders are alleging that the company’s assets are actually worth more than the company contends, the New York Times reported on Saturday. The company listed $421 million in secured and unsecured debt obligations in its February bankruptcy filing. Like many companies in the commodities business, Horsehead has stumbled. Spot prices for zinc and nickel swooned in 2015, and a new zinc plant it built in Mooresboro, N.C., encountered production problems. Still, metals prices have rebounded significantly since the company filed for bankruptcy. And some Horsehead shareholders contend the company is lowballing the value of its assets to let leading creditors gain control of it at a bargain price. The decline in Horsehead’s assets has certainly been precipitous. Just before the February filing, its assets were valued at $1 billion. Six months later, Horsehead’s financial adviser estimated that the company’s assets were worth about one-third of that. Diane Lourdes Dick, an associate professor of law at Seattle University Law School, said the Horsehead case highlighted a flaw in the bankruptcy process. “What we have here are equity owners that are functionally shut out of the process, and that provides the opportunity for exploitation by other stakeholders,” she said. “It is yet another example of the unique challenges that equity holders face when the company they’ve invested in is in chapter 11.” Read more.

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A bankruptcy judge said Primorsk International Shipping Ltd.’s creditors can vote on the oil shipper’s liquidation plan, which divvies up the proceeds from the sale of its fleet, the Wall Street Journal reported today. Primorsk sold its fleet of nine double-hulled, ice-class tankers to SCF Tankers Ltd., an affiliate of Russia’s Sovcomflot, for $215 million after filing for bankruptcy earlier this year. The sale of the vessels — which are capable of transporting crude oil in extreme conditions in the Arctic and the Russian Far East — followed an auction held in London in June. Bankruptcy Judge Martin Glenn signed off on Primorsk’s plan disclosure document at a hearing earlier this week. Proceeds from the sale won’t be enough to fully repay senior lenders, a group of banks that include BNP Paribas SA and Nordea Bank Norge ASA affiliate of investment firm Oaktree Capital, owed about $262 million.

Bankruptcy Judge A. Benjamin Goldgar said yesterday that Caesars Entertainment Corp. is unlikely to get protection from bondholder lawsuits that would last as long as its insolvent operating company is in bankruptcy, Bloomberg News reported. Judge Goldgar today will decide whether to extend a halt on lawsuits in New York and Delaware, and if so, for how long. Goldgar made it clear yesterday that he would not give Caesars a lawsuit shield that lasts until after Caesars Entertainment Operating Co. wins approval of its reorganization plan, which can’t happen until next year at the earliest. “I’ve said that isn’t going to happen,” Goldgar said yesterday near the end of a three-day hearing on possibly halting bondholder lawsuits that could impose $11.4 billion in judgments on the parent company. The lawsuits are the biggest obstacle left to getting Caesars’ main operating unit out of bankruptcy. Bondholders want to use the suits, which a court examiner found have a good chance of succeeding, to boost their recoveries to more than the 34 percent offered by CEOC.

The former chairman of Performance Sports Group Ltd, Graeme Roustan, said that he has hired investment banks Jefferies Group LLC and Canaccord Genuity to explore a possible bid for the troubled maker of hockey gear, Reuters reported yesterday. He disclosed his plans after Reuters reported on Tuesday that the sporting equipment maker has hired investment bank Centerview Partners Holdings LLC to help it negotiate with lenders to avoid defaulting on its loans. Roustan said he believes he can turn around the money-losing company, which is under investigation by securities regulators in the U.S. and Canada. The company is conducting an internal investigation into its accounting practices, which has delayed the release of its annual report.

Oil-field service company Key Energy Services Inc. intends to file for chapter 11 bankruptcy protection with a plan that would make private-equity firm Platinum Equity LLC its largest shareholder, the Wall Street Journal reported today. Under the plan, holders of senior notes, including Platinum, would own about 95 percent of the reorganized company’s common shares. Current equity holders would have about a 5 percent stake. Key Energy disclosed in June that it was in discussion with lenders about a potential bankruptcy filing. The company’s second-quarter revenue fell to $95 million from $197.5 million a year earlier. On Aug. 12, the Securities and Exchange Commission said Key Energy agreed to disgorge $5 million as part of a settlement over violations of U.S. foreign-bribery law. Key Energy expects its reorganization will reduce its debt from almost $1 billion to $250 million. Read more. (Subscription required.) 

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