%1

Caesars Entertainment Corp., the casino company taken private in a $30.7 billion leveraged buyout just before the credit crisis, has taken steps in recent weeks that signal that it’s poised for a massive debt restructuring that will saddle creditors with steep losses, Bloomberg reported today. “We expect that something is imminent,” Alex Bumazhny, a credit analyst with Fitch Ratings. Fitch, which has a CCC rating on Caesars that is reserved for borrowers where “default is a real possibility,” said that it expects the company to attempt a debt-for-equity exchange with a group of junior creditors. Caesars, with properties from Caesars Palace in Las Vegas to Harrah’s in Atlantic City, has had only one profitable year since 2008 as it struggles to service $21 billion of long-term debt amid a drop in consumer spending. Bondholders have suffered losses of $2.6 billion since September as the company gained regulatory approval for a refinancing that shielded valuable assets from lenders. Last week, advisors to a group that owns senior bonds of a Caesars unit entered into talks to restructure its borrowings. The events are putting Las Vegas-based Caesars on a path toward a $12.7 billion debt restructuring that pits Leon Black and David Bonderman, the buyout titans who took the company private with a $6 billion equity investment, against distressed-debt investors.

A federal court judge in Iowa has granted a stay in Aviva Life and Annuity Company’s civil lawsuit against three former Dewey & LeBoeuf executives for allegedly making false and misleading statements as part of a 2010 bond offering, the American Lawyer reported on Friday. The judge also allowed the defendants — former chairman Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders — to ask the U.S. Court of Appeals for the Eighth Circuit to hear an interlocutory appeal of his May 19 decision denying their motion to dismiss the case on grounds that the insurance company has no standing because it sold off the bonds and claims that are at the center of the case.

Bankruptcy seemed to signal the end for trendy women’s clothing retailer Dots, which emptied its 359 stores with going-out-of-business sales this spring, but a Florida firm in the retail industry bought the Dots brand and is slowly resurrecting it, saying it can avoid the problems that the juniors’ and plus-sized clothes retailer faced, the Wall Street Journal reported on Friday. The retailer’s new owner — named New Dots LLC — plans to open 120 Dots stores by the end of next year, Chief Executive Swapnil Shah said. Shah said he worked out deals with some landlords whose storefronts became vacant when Dots, which employed more than 3,500 people, shut down. Some of the same suppliers that once stocked Dots’ shelves have agreed to send fresh merchandise, he added. Liquidators had a May 31 deadline to empty Dots’ stores, according to legal documents filed in the U.S. Bankruptcy Court in Newark, N.J.

Dutch coal miner New World Resources NV filed for bankruptcy protection in a U.S. court on Wednesday while officials negotiate cuts to the roughly EUR825 million ($1.1 billion) debt owed by the company, which has struggled to profit amid depressed global coal prices, Dow Jones Daily Bankruptcy Review reported today. New World Resources, whose operating subsidiaries mine for coal in the Upper-Silesian coal basin in Czech Republic and Poland, filed for chapter 15 protection. The company filed the case to block bondholders who are unhappy with the repayment terms of a proposed restructuring plan from filing a U.S. lawsuit to stop it. A British court has already approved the proposed restructuring plan.

Lenders to Puerto Rico’s electric power authority are giving the beleaguered utility another two weeks before it has to make past-due payments on its lines of credit, the New York Times DealBook blog reported yesterday. The Puerto Rico Electric Power Authority, which is known by its acronym Prepa, said it was engaged in “productive discussions” with its bondholders, bond insurers and the banks that provide the short-term bank lines. Prepa owes money on two main credit lines — a roughly $250 million line from Citigroup and a $550 million line from a syndicate of banks. If Citigroup and the other lenders force Prepa to pay immediately, it could trigger the authority’s restructuring and increase the likelihood of losses for the banks. The agreement allows Prepa to delay until Aug. 14 certain payments that were due last month, the authority said, but it’s unclear over the long term how the utility will be able to come up with the money that it owes.

Zodiac Pool Solutions SAS, a supplier of swimming pool products controlled by asset manager Carlyle Group LP, filed for U.S. bankruptcy court protection seeking recognition of U.K. court proceedings on its debts, Bloomberg News reported yesterday. The company listed assets of as much as $1 billion and debt of more than $1 billion in chapter 15 documents filed yesterday. Under a U.K. “scheme of arrangement,” the company will make a 145 million-euro ($194 million) payment and some debt maturities will be amended and extended. Zodiac’s creditors “voted substantially in favor” of the U.K. plan, according to U.S. court papers.

Revel AC Inc., whose Atlantic City, N.J., casino has been in bankruptcy twice since it opened in 2012, won permission to pay executive bonuses of as much as $1.75 million tied to the sale of its business, Bloomberg News reported yesterday. U.S. Bankruptcy Judge Gloria M. Burns at a hearing yesterday authorized the company to make the bonus payments after the resort’s fate is determined at an auction set to be held next week. The company’s struggles illustrate the larger issues facing Atlantic City, which has already seen the Atlantic Club close and may have two other casinos shut down by the end of September. Caesars Entertainment Corp. plans to shutter the Showboat on Aug. 31 and the Trump Plaza Hotel & Casino said it plans to end operations on Sept. 16.

Ambient Corp., which sells "smart grid" technology to power companies, filed for bankruptcy yesterday with a $7.5 million offer from an affiliate of Sweden's Ericsson, Dow Jones Daily Bankruptcy Review reported today. Massachusetts-based Ambient filed for chapter 11 protection saying that the company has struggled to find buyers for its patented devices that plug into a utility's power grid to help the utility communicate with its end-users.

Fisker Automotive Holdings Inc., the defunct maker of luxury plug-in cars, won bankruptcy court approval of a liquidation plan that will distribute proceeds from a $149.2 million asset sale, Bloomberg News reported yesterday. Fisker, now known as FAH Liquidating Corp., sought creditor protection in November, blaming the bankruptcy of its battery supplier, safety recalls and shipments lost to Hurricane Sandy. In February, the company won court approval to sell its assets to China’s Wanxiang Group Corp. for an offer valued at $149.2 million, almost six times what it had sought when it filed for bankruptcy. Wanxiang previously bought the successor to the U.S. company that had supplied Fisker’s batteries. U.S. Bankruptcy Judge Kevin Gross yesterday approved Fisker’s liquidation plan, which received support from about 95 percent of all voting creditors by number and more than 99 percent by value.

Private equity firm KKR & Co. LP said on Friday that its special situations fund would lead an investment of more than $680 million in Preferred Sands, keeping one of North America's largest producers of sand for oil and gas producers in business, Reuters reported on Saturday. Headquartered in Radnor, Pa., privately held Preferred Sands produces and distributes frac sand and proppant materials used predominantly in oil and gas shale drilling. Its network of mines have the capacity to produce more than 9 billion pounds of sand every year. Preferred Sands tapped restructuring advisors last September after it failed to make timely payments on its bank loans, according to Moody's Investors Service Inc. The ratings service has attributed the company's woes to competition in the frac sand industry, its lack of high-quality sand reserves, and a less developed logistical network relative to its major rivals. KKR said that it had agreed to refinance the company through equity and debt of more than $680 million. A new first lien credit facility has been underwritten by KKR's capital markets arm and investment bank Jefferies Group LLC.