Caesars Files For Bankruptcy

Tyler Durden's picture

Et tu, Caesars?

In what has been the most anticipated bankruptcy case in the past several years, hours ago Caesars Entertainment put its main operating unit under Chapter 11 bankruptcy protection in Northern Illinois bankruptcy court (case 15-01153) even as a splinter group of dissident creditors including Appaloosa and Oaktree, holders of about $41 million of Caesars debt and which allege the company has siphoned off billions in value from creditors, put the company into involuntary bankruptcy in Delaware bankruptcy court on January 12. As a reminder, Caesars was one of the sterling LBOs of the last credit bubble, when in 2008 Apollo and TPG decided to take the company private. The problem, as is always the case: too much debt, especially when combined with a broken business model, as Caesars has lost money every year since 2009.

While the Voluntary Bankruptcy Petition, see below, lists some three pages of operating units and affiliate debtors, it preserves the equity interests of the financial sponsors by keeping the parent Caesars Entertainment, out of bankruptcy.

As the petition also shows, the operating unit, which filed with more than 100 affiliates, listed about $12.4 billion in assets and $19.9 billion in liabilities. The Affidavit, to be filed shortly, will be a very riveting read on the real state of the Las Vegas gambling industry. 

The bankruptcy caps a long and contentious litigation between the various groups of creditors. As Bloomberg reports, last year, a trustee for holders of so-called second-lien notes sued the company and top management last year, accusing them of plundering the operating unit of its most valuable properties. The dissident creditors accused Apollo and TPG of trying to create a “good Caesars” to hold the valuable properties and a “bad Caesars” to owe most of the debt.

The conflict came to a head earlier this week, when some of those creditors asked the Wilmington, Delaware, bankruptcy court to put the unit into Chapter 11 and hire an examiner to review the asset moves.

 

Typically, when two bankruptcies for the same company are sought in different jurisdictions, the judge in the case that was filed first determines where they will be heard. Creditors in the involuntary bankruptcy had asked the judge in Delaware to bar any action in a rival case.

 

Caesars said in a court filing in Delaware yesterday that the creditors are trying “to wreak havoc on the orderly process the debtors, their professionals, and the many consenting stakeholders have been preparing for months.”

 

U.S. Bankruptcy Judge Kevin Gross in Wilmington has said he would consider a request to prevent any court action in a second case after it’s filed. The creditors today asked Gross to halt the proceedings in Chicago.

What's next for the debt-ridden casino operator? Under the consensual creditors' proposal, Caesars Entertainment Operating Co. would become a real estate trust with two divisions, one to hold property and one to manage casinos. The new company would have about $8.6 billion in debt. "The Caesars’ parent, in turn, would give senior creditors a stake in the new companies, according to negotiation details released in December. A judge would have to approve the arrangement."

The plan has received support from more than 80 percent of so-called first-lien noteholders, Caesars said in a statement today. Randall S. Eisenberg of AlixPartners was named chief restructuring officer of the operating unit, according to the statement.

The good news for an entirely different set of habitual gamblers, namely those eager to try their luck in the Caesars casino today, arguably a less rigged venue than the US equity market, it will be business as usual: "The properties across the entire Caesars Entertainment network are open and will operate without interruption,” Gary Loveman, Caesars chairman, said in the statement.

Full bankruptcy petition below.

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Never1's picture

I thought the house always wins?

Haus-Targaryen's picture

I think Caeser's issues have to do more with shitty investments and poor management moreso than slutty slot machines.  

Ignatius's picture

Maybe the skim was too steep.

Really?  Bankruptcy of a casino with a strong brand?  Really??

Smell test problem here.

Relentless101's picture

Everyone must be fired. Millions of people hand them fist fulls of money every nano second and They fuck it up. This dip shit CEO went to fucking MIT. They're supposed to be good with numbers and shit.

Gambling Addicts + Personal Fiscal Irresponsibilty = Dead Presidents.

Ignatius's picture

Maybe it's as simple as that MIT graduates, like Fredo, are not immune to the temptation of doing cocktail waitresses two-at-a-time during working hours.

ACP's picture

WHAT THE FUCK just happened?

Eminis just went from 2017 to 1987, back up to 1997???

Shit's gettin' real ma niggaz!

 

Edit: Hey Tylers, what's the scoop? Nothing on AP or Reuters??

Relentless101's picture

Has to be algo. The chart went straight lawndart. 

ACP's picture

The shit that just happened was like the magnitude 3.0, before the magnitude 8.0. This market is cracking big time.

Relentless101's picture

Coincides with the SNB announcement. USD-CHF got raped minutes just before the plummet.

ACP's picture

This will definitely leave a mark.

BuddyEffed's picture

The weaker business models such as the ones both Caesars and BofA are based on are showing their weakness now!

PrayingMantis's picture

 

 

“So give back to Caesar what is Caesar’s, and to God what is God’s.” ~ Jesus - Matt 22:21

... game over, God wins ... :)

johngaltfla's picture

The casino is no longer Caeser's. Check out FX markets today. The 1 minute moves will give you whiplash!!!

Swiss National Bank Cuts Overnight Lending rate to – 0.75% Ends Cap on Swiss Franc

ACP's picture

Are you sure about the second graph though?

I'm showing a drop from 1.02 to 0.993.

Is my platform stuck?

 

Edit: OK now it's showing a gap down to 0.895. WTF??

johngaltfla's picture

Your platform was fucked this morning. Everyone who wasn't live with a good one got assraped if they were short CHF or long EUR....

topshelfstuff's picture

recall the movie "GOODFELLAS", well this is the Corporate version of the BLOWOUT the Mob did on the Bar/Restaurant

old naughty's picture

nothin' happen overnight (except perhaps the collapse !)...they sold their Macau piece for 400+ m, quite a premium, 1.5 year ago.

Max Cynical's picture

Casinos are like the FED...they print money. How do you fuck that one up?

clade7's picture

maybe if they'd served more foon and less shitgum, Oh and didnt ban FrancisSawyer from the crap tables..for saying things like "c'mon 7, cheesepope needs a new hat"!

redonkulous stuff like that, all would be unpossibly well at this juncture. 

 

Then again, maybe because NOBODY has any fucking money left!

Usurious's picture
Usurious (not verified) clade7 Jan 15, 2015 6:29 AM

 

 

francis_sawyer was Brilliant!!

Chupacabra-322's picture

I second the motion. Frances was a Creative Masterful Sarcastic Comedic Genius. Sorely missed. Cheers Frances.

Thisson's picture

No, Francis_Sawyer was a bigoted cunt who brings discredit onto this entire site.  Good riddance!

clade7's picture

dupe..dupe, damnit! 

Element's picture

 

 

I thought the house always wins?

 

Spectacle costs a packet these days ... the propaganda stopped working.

Panic Mode's picture

Yes, it is still true. The WHITE-house always wins.

Pumpkin's picture

They do, didn't you see the part that says that they siphoned off billions in assets away from the creditors?  Why anyone would loan a fiction money is beyond me.  Especially after GM.

auntiesocial's picture

Caesars should show resolve and hold out for QE 7 or 8... everything will be okey dokey by then...

JuliaS's picture

They White House always wins.

ebworthen's picture

I'd stayed at Wynn run resorts in Vegas before I stayed at Caesars so the bar was high.

Nothing at Caesars was as good as the Wynn resorts:  the payouts were worse, the costs higher, and nothing as good as Wynn or the Hilton, and on par with Luxor and Sahara (R.I.P.) but more expensive by far.  I had a better stay at the 4 Queens downtown than at Caesar's.

Haus-Targaryen's picture

I've found -- habitually -- the best deal in Vegas is the Vdara.  Physically attached to 2 casinos (Aria & Bellagio) with the Cosmopolitan less than 50 yards away.  However, the Vdara has no casino of its own, so its got lower overhead costs, which gets passed onto the consumer.  

I don't even bother looking around anymore in Vegas, if I cannot get into the Vdara -- I don't go.  

auntiesocial's picture

just stay away from the laser sunbeam of death at the pool and you will be alright.

noben's picture
noben (not verified) Jan 15, 2015 4:01 AM

Is too Brutus?

There is honor among thieves, until there isn't.

medium giraffe's picture

"The dissident creditors accused Apollo and TPG of trying to create a “good Caesars” to hold the valuable properties and a “bad Caesars” to owe most of the debt."

This only works for banks.

El Hosel's picture

 I couldn't sleep last night, had  a feeling some kind of crash event was in order..... A Day early, thats pretty good for me.

ILikeBoats's picture

File in Illinois instead of Delaware?  What are the links between the top management and the corrupt thugs running Illinois or Chicago, was my first thought...?

medium giraffe's picture

Euro just shat its pants.

clade7's picture

Boy!  It sure did!  Like motherfuckin' boom!  better go have a look see whats up in the world...

medium giraffe's picture

Looks like the SNB just unpegged.

medium giraffe's picture

Lol, f me - take a look at the EUR/CHF. 

achmachat's picture

that's exactly why I can't blink anymore!

medium giraffe's picture

You don't see 1600 pip candles every day! lol.  Seems appropriate to be discussing this on the Vegas article thread.

Ignatius's picture

"better go have a look see whats up in the world..."

Russian natural gas shut off?

El Hosel's picture

"Stufff" is up Gold Silver Gas.....  I wonder If the Federal traders are up yet, better make that coffee double strength today boys and girls.

Even VOL might catch a bid

achmachat's picture

somebody is always front-running the rest...

wth just happened again?

highly debtful's picture

Casino economy and now this news flash about Caesars. There must be a good joke hidden in there somewhere, right? 

old naughty's picture

guess the wild wild west is no longer sustainable?