Caesars shares punished after judge's ruling favors creditors

3 June 2015

Investors hammered the stock price of Caesars Entertainment Corp. over the past two days after a federal judge handed a small victory to creditors seeking to collect $750 million from the casino company’s bankrupt operating division.

Shares of Caesars, traded on the Nasdaq, fell 3.31 percent, or 26 cents, to close at $7.60, the company’s lowest closing price since February 2013. On Monday, Caesars’s shares declined 16 percent in the first trading day after Bloomberg News reported the judge’s ruling late Friday.

The lawsuit is one of several legal actions being taken against Caesars by several creditor groups who fear they will be cut out of recovering any funds through the Chapter 11 bankruptcy reorganization of Caesars Entertainment Operating Co. The division was placed into a pre-packaged bankruptcy in January.

Creditors are suing Caesars over the company’s sale of several casinos, including Planet Hollywood Resort & Casino, Bally's - Las Vegas and Harrah's New Orleans Casino, to subsidiary Caesars Growth Partners in 2014. Caesars Entertainment plans to merge Caesars Growth Partners back into the parent operation after the bankruptcy is concluded.

Caesars outside spokesman Stephan Cohen of Teneo Holdings told Bloomberg in an email the company has “repeatedly argued in court, the parent guarantee was validly terminated in accordance with the terms of the indentures.”

In a Securities and Exchange Commission filing in March, Caesars said the lawsuits represent a “material uncertainty” that could imperil the company’s ability to continue as a going concern.

According to Bloomberg, U.S. District Judge Shira Scheindlin ruled last week in New York the trustee representing CEOC creditors can ask her to rule on parts of the lawsuit without first holding a trial.

A favorable ruling could force Caesars Entertainment into bankruptcy because of the liabilities it would owe.

Caesars Entertainment has a gaming industry high $22.8 billion in long term debt, of which $18.4 billion is attached to CEOC. Through bankruptcy, which was filed in Chicago, the company hopes to eliminate almost $10 billion of the division’s debt and convert CEOC into a real state investment trust.

CEOC controls Caesars Palace, Caesars Atlantic City, Harrah's Reno Casino and Hotel and more than a dozen regional properties.

On Monday, Caesars’s three Atlantic City resorts faced a new challenge. New Jersey lawmakers introduced a bill that would allow three casinos to be built in the northern part of the state. Gov. Chris Christie said he supports the measure.

Related Links
Caesars Entertainment Ownership Details
Bally's - Las Vegas Details
Caesars Atlantic City Details
Caesars Palace Details
Harrah's Reno Details
Harrah's New Orleans Casino Details
Planet Hollywood Las Vegas Details


Copyright GamingWire. All rights reserved.
Featured Vendors
Elite Gaming USA
TribalHub
Elite Gaming USA
Provides a diverse inventory of refurbished gaming equipment and supplies from top manufacturers
TribalHub
22nd Annual TribalNet Conference & Tradeshow Nov 8-11, 2021 Gaylord Texan Resort, Grapevine TX
Betson Imperial Parts & Service
Slot-Tickets Worldwide
Betson Imperial Parts & Service
You one stop shop for all your gaming and OEM needs!
Slot-Tickets Worldwide
Slot-Tickets® Worldwide, The Original and Still the Best.
Bar Maid Corporation
Castle Merchandising Inc
Bar Maid Corporation
Clean and dry thousands of chips, dice and tiles per hour with the high-speed CHIP CHAMPION machine!
Castle Merchandising Inc
Brand Name Products for your Player Rewards and Loyalty Programs
Rymax Marketing Services, Inc.
Sunkist Graphics, Inc.
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
Sunkist Graphics, Inc.
Specializing in the creation of best-of-breed gaming graphics - slot glass, sign faces, and more
Casino Essentials
RSA Executive Search
Casino Essentials
The Ultimate Online Training Platform for the Casino Industry
RSA Executive Search
A Boutique Search firm specializing in the Recruitment of Hospitality and Gaming Entrepreneurs
Casino Schedule Ease
Gaming Tickets, Inc.
Casino Schedule Ease
Get a 90-Day Free Trial of 100% contactless, customizable table game & full casino scheduling
Gaming Tickets, Inc.
35 years in the gaming industry - premium quality slot tickets, lottery tickets on time under budget
Breathe Easy with Smokefree Casinos- a project of the American Nonsmokers’ Rights Foundation
Slot Machines Unlimited
Breathe Easy with Smokefree Casinos- a project of the American Nonsmokers’ Rights Foundation
Breathe easier during COVID-19. We can help you reopen smokefree for everyone’s health.
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience


Your Guide to 15,754 Gaming Industry Suppliers