Judge Orders Caesars’ Entertainment to Face Creditor Lawsuits

by San Antonio Attorney

Caesars Entertainment has been ordered by a bankruptcy judge on Aug.  26 to deal with creditor lawsuits, which could force the casino operator to seek for bankruptcy protection.

The casino, funded by TPG Capital and Apollo Global Management, had wrestled to prolong a stall on legal actions aiming to drive the parent company to pay up on $11 billion of financial obligations it owed through the bankrupt Caesars Entertainment Operating Company (CEOC).

Chicago Bankruptcy Judge Benjamin Goldgar denied Caesars’ request to extend the automatic stay that ends on Aug.  29.  The judge had stopped the lawsuits against Caesars to give the casino more time to strike a restructuring agreement with creditors.

However, Goldgar was dissatisfied with the casino’s efforts to reach a settlement.

According to a source, the judge said that Caesars’ effort to negotiate was a sham.

The judge said he was disturbed that Caesars employed lobbyists in order that it can influence the Congress to alter bankruptcy laws and it would become harder for creditors to succeed in their lawsuits.

A hearing has been scheduled by Manhattan federal Judge Jed Rakoff on Aug.  30 in one lawsuit demanding the parent company to acknowledge the CEOC’s unpaid debt.

If that is the case, Caesars has held that it does not have the funds to pay creditors.  According to sources, the parent company is planning to file an emergency appeal on Aug.  29 to postpone the hearing on Tuesday.

According to Caesars, it was despondent by the bankruptcy judge’s ruling as it agreed to provide “a sizeable contribution” to facilitate reorganize the gambling company and let it exit the bankruptcy process as quickly as possible.

Caesars Entertainment Corp.  was able to dodge bankruptcy even after its chief operating unit has filed for Chapter 11 in January 2015.  However, the recent decision of the bankruptcy judge threatens the parent company to foot the bill for several billion dollars in debts.

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