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The operating unit of Caesars Entertainment Corp, the largest U.S. casino company, filed for chapter 11 protection in Chicago yesterday to cut $10 billion of debt, but a Delaware judge intervened to halt the case before it got started, Reuters reported yesterday. The unusual legal standoff marked the start of a more public phase of complex and contentious debt negotiations. Until now, the company's attempts to cut interest payments after years of red ink have been kept mostly private. Caesars maintains it has the support of its senior noteholders to implement the bankruptcy plan, which would reduce the operating unit's debt to $8.6 billion from $18.4 billion. The bankruptcy was filed overnight yesterday by Caesars Entertainment Operating Company Inc. and 179 affiliates in the U.S. Bankruptcy Court in Chicago. However, junior noteholders, led by the Appaloosa Management hedge fund, filed an involuntary bankruptcy petition against the operating unit on Monday in Delaware. They argued at an emergency hearing in Wilmington yesterday that their case should take precedence and the bankruptcy should proceed in Delaware. Bankruptcy Judge Kevin Gross agreed to put the Chicago proceeding on hold, but said that he would allow routine "first-day" requests, such as those that would enable employees to be paid. Judge Gross asked what agreements he might be disrupting by issuing a stay and taking time to sort out which court would handle the case.

The operating unit of Caesars Entertainment Corp, the largest U.S. casino company, filed for chapter 11 protection to implement its plan to cut $10 billion of debt, Reuters reported today. The company said it has the support of its senior noteholders to implement the plan, which will reduce the operating unit's debt to $8.6 billion from $18.4 billion. The bankruptcy protection was filed by Caesars Entertainment Operating Company Inc. and several affiliates in the U.S. Bankruptcy Court for the Northern District of Illinois. They listed assets and liabilities of over $1 billion, according to the filing. Much of the debt is a legacy of the $30 billion leveraged buyout of Harrah's Entertainment that was led by Apollo Global Management and TPG Capital in 2008. Under the plan, the operating unit will be split into a casino company and a publicly traded real estate investment trust.

EnPro Industries and a bankrupt subsidiary, Garlock Sealing Technologies, have struck a deal with a plaintiffs' lawyer to set aside $357.5 million to cover asbestos related claims, but others are expected to oppose the deal, Reuters reported yesterday. EnPro and Garlock, a bankrupt maker of asbestos-lined gaskets, said on Tuesday that the agreement could be approved in 15 to 24 months as part of an amended reorganization plan it will submit to the North Carolina court where Garlock filed for chapter 11 bankruptcy in June 2010. If approved, the plan would allow a reorganized Garlock to shed its liability for asbestos litigation, the latest phase in a bankruptcy touted by manufacturers as fundamentally shifting the legal terrain in asbestos cases in their favor.

A Kentucky company that’s brewing iced tea inspired by “Duck Dynasty’s” Uncle Si on the hit A&E reality TV show has filed for bankruptcy, accusing the show’s stars of breaking their promises to promote the beverage, the Wall Street Journal reported today. The beverage maker’s federal lawsuit against Duck Commander Inc. — the Robertson clan’s duck-call business in Louisiana — portrays the “Duck Dynasty” brand as growing too big, too soon. In the glow of the spotlight, Duck Commander has made dozens of licensing agreements to grow its brand. That includes a deal with Chinook USA LLC to make and distribute a beverage named for Uncle Si, who drinks from a bottomless cup of iced tea on the show. At least one branding expert said the Duck Commander family has too many products and trinkets, telling officials at the beverage maker that it’s “sad to walk through their retail store in Monroe and see all the junk they’ve licensed,” according to the suit. The over-scheduled Duck Commander family allegedly broke its contract to promote Uncle Si’s Iced Tea in media interviews and special appearances, according to the lawsuit. Si Robertson also failed to promote the tea on nationally televised morning shows, the lawsuit said.

A judge said on Monday that the three former leaders of defunct law firm Dewey & LeBoeuf — Steven Davis, Stephen DiCarmine and Joel Sanders — will head to court on April 27 to kick off a trial expected to last four to six months, the Wall Street Journal reported today. The three stand accused of accounting fraud as part of an alleged scheme to hide the true nature of Dewey’s financial condition in the run-up to the firm’s dramatic 2012 collapse. All three have maintained their innocence and are free on bail awaiting the trial.

Junior creditors of Caesars Entertainment Corp. moved to force the main operating unit into bankruptcy in an attempt to block a plan to protect senior lenders at their expense, after contentious wrangling over the casino company’s future, Bloomberg News reported today. The involuntary chapter 11 filing today by Appaloosa Investment LP and other junior lenders in Delaware pre-empts Caesars’ own effort to put the unit under bankruptcy court protection and threatens to scuttle a deal between the company and senior creditors. Appaloosa asked the court to appoint an examiner to investigate claims that insiders “plundered” the unit, paying themselves hundreds of millions of dollars while moving assets out of the junior creditors’ reach. The filing by Appaloosa and other holders of second-priority senior secured notes in the unit follows months of negotiation and litigation between Las Vegas-bases Caesars and its creditors.
http://www.bloomberg.com/news/print/2015-01-12/appaloosa-files-to-put-c…

In related news, bondholders of Caesars Entertainment Corp. will continue their fraud lawsuit against the casino company controlled by Apollo Global Management LLC (APO) even after its operating unit’s planned bankruptcy filing around Jan. 15, Bloomberg News reported on Friday. Caesars was asking the judge to toss the lawsuit, saying that bankrupt companies are automatically protected from litigation. The bondholders, who accused Caesars and its directors from Apollo of “looting” assets from the insolvent unit that owes them money, said their claims against those parties aren’t affected by the rule. The Las Vegas-based company has made agreements with a few lenders to try to use bankruptcy court to cut about $10 billion of debt from the money-losing unit that runs the casinos by offering them fees and special payments, filings show. Those who sign up must agree to drop out of lawsuits, Caesars says in regulatory filings.
http://www.bloomberg.com/news/print/2015-01-09/caesars-bondholders-to-c…

The trustee in the Golden Guernsey Dairy bankruptcy case has filed lawsuits in federal court seeking to recover about $3.6 million that the company paid to distributors and other businesses, the Milwaukee Journal Sentinel reported today. Trustee Charles Stanziale took the actions last week against 20 of Golden Guernsey's customers, suppliers and milk haulers. He's seeking anywhere from $24,000 to $911,507 from the individual defendants, according to the filings. Waukesha-based Golden Guernsey closed Jan. 5, 2013, after more than 80 years in business. The sudden shutdown of the milk-bottling and dairy processing plant left more than 100 people out of work. The company filed for chapter 7 bankruptcy liquidation shortly after the plant closing.

Victims of the Lac-Megantic oil-by-rail disaster that killed 47 people in the Canadian province of Quebec in 2013 agreed to a nearly $200 million settlement with some of the firms involved, including the insolvent rail operator at the center of the tragedy, Reuters reported on Saturday. Montreal Maine and Atlantic, along with its insurers, founder Edward Burkhardt, and various other companies, will pay into the settlement fund, which will be distributed to the victims of the train derailment and explosion, according to lawyer Peter Flowers of Meyers & Flowers. A draft plan of the arrangement was filed in the Quebec Superior Court on Friday as part of MMA's bankruptcy proceedings in Canada and a similar plan will also be filed in a U.S. court. The settlement is subject to approval by the courts.

Three former executives pleaded not guilty yesterday to charges stemming from a chemical spill that fouled drinking water for about 300,000 West Virginians, Reuters reported today. Prosecutors in December accused Freedom Industries Inc, its former president Gary Southern and other officers of negligence and fraud after the discharge of a chemical pollutant into the Elk River near Charleston a year ago. The leak of a chemical foam used to wash coal breached a containment area one mile upstream of a water treatment and distribution plant near Charleston, W. Va., according to the charges. Company officials were also accused of failing to maintain the containment area and failing to properly inspect the tank containing the chemical. Southern, who was arrested in early December in Florida and released after posting a $100,000 bond, pleaded not guilty yesterday.

Two creditors have formally challenged the bankrupt city of San Bernardino’s (Calif.) plan to repay its debts to CalPERS, setting up another big court fight over pension plans and whether cash-strapped governments can keep their promises to retirees, the Sacramento Bee reported today. The challenge comes two months after San Bernardino officials said they would pay the city’s $24 million-a-year CalPERS bill in full, ending two years of suspense. The city also revealed it had begun repaying millions of dollars in past-due obligations to CalPERS, debts that arose when San Bernardino halted payments to the pension fund for several months after filing for bankruptcy in 2012. Ambac Assurance Corp., a New York bond insurer, and EEPK, a Luxembourg bank, sued the city on Wednesday in U.S. Bankruptcy Court in Riverside, Calif. Their complaint: San Bernardino shouldn’t be paying its CalPERS debt when it hasn’t paid them on debts totaling more than $59 million.