Caesars, Creditors Reach Restructuring Deal
September 27 2016 - 10:50AM
Dow Jones News
Caesars Entertainment Corp. said Tuesday that it has reached a
deal to resolve the long-running battle over the $18 billion
restructuring of the casino company's main operating unit.
The deal, outlined in a filing with the Securities and Exchange
Commission, brings the major creditors of the operating unit,
Caesars Entertainment Operating Co., or CEOC, on board with its
restructuring plan. The latest version of the proposal will offer
an improved payout for the junior bondholders that had fought the
plan, while other creditor groups will see the same or smaller
payouts than previously proposed.
Specifically, the junior bondholders can expect to recover about
66 cents of every dollar they are owed, up from about 27 cents
under a prior restructuring plan. Unsecured creditors' recoveries
will also rise to about 66 cents.
Senior lenders and senior bondholders will still recover 115
cents and 109 cents on the dollar, respectively, the filing says. A
smaller group of bondholders will see their recoveries fall by
about one cent to 83 cents on the dollar.
Restructuring talks were to have wrapped up last week, but in
light of the "significant progress" made in recent days, Caesars
said Monday that they were ongoing.
At the heart of the CEOC restructuring plan is a settlement of
lawsuits against Caesars, its private-equity backers—Apollo Global
Management and TPG—and others. For months, junior bondholders had
refused to support the restructuring pact and settlement, arguing
Caesars and its backers were getting the benefit of broad liability
releases without providing fair consideration in return.
Caesars said Tuesday that CEOC plans to submit a revised
restructuring plan for bankruptcy-court approval. The restructuring
remains subject to other conditions, including regulatory
approval.
CEOC sought chapter 11 protection in January 2015 in the U.S.
Bankruptcy Court in Chicago.
Write to Jacqueline Palank at jacqueline.palank@wsj.com
(END) Dow Jones Newswires
September 27, 2016 10:35 ET (14:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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