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Two listed units of Caesars Entertainment, the troubled casino and resort company, are combining in an attempt to build credibility with creditors ahead of a planned bankruptcy protection filing for its operating unit, due in the coming weeks, the Financial Times reported today. Caesars Entertainment, the parent company, will acquire its affiliate Caesars Acquisition Co. in a stock-for-stock transaction that will give the combined entity a market capitalization of $3.2 billion, the company said. The transaction, which boosts the parent company’s assets and cash position, is designed to cut the amount of external financing the heavily indebted operating company, Caesars Entertainment Operating Co., might need in a bankruptcy, thereby reducing any dilution of existing investors.

Some of the country’s top restructuring professionals who contributed to the final report of the ABI Commission to Study the Reform of Chapter 11 released earlier this month made it clear that, aside from strengthening tools for a bankrupt company, they want to make the process cheaper, according to a post yesterday on the Wall Street Journal Bankruptcy Beat blog. “Bankruptcy has always been expensive, and there has always been an effort to rein in excessive costs,” said Prof. Kenneth Klee, who helped engineer the 1978 overhaul and was a member of the Commission. The Commission’s recommendations propose to clarify rules on dozens of issues on which bankruptcy judges have disagreed, giving lawyers — in theory — less to fight about. Two proposals address a big reason why costs can spiral upward: Bankrupt companies have to pay the legal bill for others. Besides their own bankruptcy lawyers, investment bankers, financial advisers, accountants and public relations firms, bankrupt companies are legally obligated to pay the bills of the creditor committee that forms to advocate for vendors, employees and other unsecured creditors. (Subscription required.)
http://blogs.wsj.com/bankruptcy/2014/12/22/proposed-bankruptcy-fixes-wo…

To read a copy of the Commission’s final report and its recommended principles on professional compensation, please click here: http://commission.abi.org.

Several major broadcasters refused to back down Friday from attempts to control when and to whom bankrupt Aereo Inc. can sell its technology, Dow Jones Daily Bankruptcy Review reported today. Facing an impasse between the failed TV-streaming service and broadcasters including CBS Corp., Walt Disney Co.'s ABC, Comcast Corp.'s NBC and 21st Century Fox Inc.'s Fox, Bankruptcy Judge Sean Lane held off on approving a proposal outlining how Aereo plans to sell its assets. As of Friday afternoon, Aereo and broadcasters were privately discussing ways to resolve differences on the sale process, including at what point Aereo can begin deleting its servers and how much time broadcasters would have to oppose any prospective buyers.

Caesars Entertainment Corp. today agreed to acquire affiliate Caesars Acquisition Co. in a stock-for-stock merger that will better position the $18.4 billion debt load of its largest unit, the Wall Street Journal reported today. The acquisition also will consolidate the parent company’s stake in properties such as Planet Hollywood and Bally’s Las Vegas, online gambling operations and other assets it owns with Caesars Acquisition. Under the terms of the deal, Caesars Entertainment shareholders will own about 62 percent of the combined company, while Caesars Acquisition shareholders will own about 38 percent. The deal marks the latest effort by Caesars Entertainment and its private-equity backers, Apollo Global Management LLC and TPG Capital LLP, to shore up the company’s finances after the casino company’s 2008 leveraged buyout. Hamlet Holdings LLC, an entity controlled by Apollo and TPG, has a 66 percent stake in Caesars Acquisition.

A Texas jury has found Credit Suisse fraudulently enticed investors to back a $540 million loan for the Lake Las Vegas resort, only to have the borrower quickly default, Reuters reported yesterday. The jury set damages at $40 million, according to court documents filed on Friday in state court in Dallas. Zurich-based Credit Suisse was found to have used inflated appraisals to convince an affiliate of Highland Capital Management in 2007 to refinance the Nevada resort community, which sought chapter 11 protection a year later.

LightSquared, the bankrupt wireless venture owned by Phil Falcone's Harbinger Capital Partners, on Thursday submitted a new restructuring plan under which Harbinger would hold onto a sizable stake in the company, Reuters reported yesterday. The plan is the latest in a string of so far unsuccessful restructuring efforts as Harbinger wrangles for control of LightSquared with its largest creditor, satellite mogul Charles Ergen. Throughout LightSquared's two-and-a-half-year journey in chapter 11, the company and creditors have advanced various proposals to fund its exit, some including Harbinger and others all but eliminating it from the capital structure. The latest would give Harbinger a 44 percent equity stake in a reorganized LightSquared, but no board membership or control over day-to-day operations. Fortress Investment Group and Centerbridge Partners, both LightSquared investors, would own 26 percent and 8 percent, respectively. Ergen's $1 billion chunk of LightSquared's loan debt would be repaid via notes.

Dutch carmaker Spyker has filed for bankruptcy due to insufficient funds from a bridge loan, Automobile Magazine reported yesterday. Spyker Companies, which also includes subsidiaries Spyker Automobielen and Spyker Events & Branding, had been losing money ever since its deal to purchase Saab from General Motors fell through in 2012. When General Motors announced it would close the Saab brand in 2009, Spyker stepped in to buy out the company, and the sale went through in 2010. The two companies intended to continue production of Saab cars in Sweden. After Saab began to lose money, Spyker was unable to compensate for losses, and Saab filed for bankruptcy in 2011. Spyker filed a lawsuit after this claiming that GM took action against the Saab-Spyker deal, but the claim was dismissed, and Saab was then sold off to a Chinese company that eventually formed National Electric Vehicle Sweden. A few other deals with various partners fell through, and Spyker continued to lose money until reports surfaced last month that it could not pay its bills and was in danger of eviction from its factory in the Netherlands. Now, the bankruptcy filing is a result of this inability to pay, as Spyker’s statement says that “committed bridge funding did unfortunately not reach the company in time.”

Billionaire investor Carl Icahn offered $20 million in financing on Thursday to keep the Trump Taj Mahal from becoming the fifth casino to close this year in New Jersey's troubled Atlantic City, once the only major destination for gamblers on the U.S. East Coast, Reuters reported yesterday. The Taj, owned by bankrupt Trump Entertainment Resorts Inc., is slated to close on Saturday. It is not clear how long the additional financing from Icahn, who holds the mortgage to the property, could keep the Taj operating. The offer came after the union representing casino workers claimed that Icahn had "gone back on his word" by scrapping a more far-reaching, last-minute deal — signed by both the union and the company — to save the Taj.

Binder & Binder, one of the largest social security disability firms in the U.S., filed yesterday for chapter 11 protection, Reuters reported today. The firm listed assets and liabilities of between $10 million and $50 million in its bankruptcy filing. Binder & Binder, founded by brothers Harry and Charles Binder in 1975, represents people seeking disability benefits from the government. U.S. Bank National Association and Capital One have agreed to provide debtor-in-possession financing of up to $26 million, the filings showed.

A Delaware judge said that Caesars Entertainment Corp., the casino operator struggling to restructure $18.4 billion of debt, must face trial sooner than usual on whether a receiver should take control of its main operating unit, Bloomberg News reported yesterday. The trial still won’t come before a mid-January hearing on a request by Caesars to dismiss a creditor group’s lawsuit or move it and a related case to a court in New York, Chancery Judge Sam Glasscock said yesterday. That would be around the time Caesars has considered putting its operating unit into bankruptcy, which would automatically halt the lawsuit. As the legal maneuvers proceed in Delaware, the company and its senior creditors are negotiating how to reshape Caesars Entertainment Operating Co. into separate entities, one to own property and one to manage casinos and hotels. Those talks have contemplated putting the operating company into chapter 11 on Jan. 15, according to documents released by one creditor group that had been involved in the discussions.