Caesars Entertainment Corporation in major debt
Caesars Entertainment Corporation is the parent company of the casino operations company Caesars Entertainment Operating Company which is heavily in debt. Caesars Entertainment’s total debt is 25.5 billion dollars and Caesars Entertainment Operating Company owes just over 18 billion dollars of this. Caesars Entertainment was founded in 1937 in Reno Nevada and was formerly known as Harrah’s entertainment. The name was changed to Caesars Entertainment Corporation in 2010. The company has grown to become one of the leading casino entertainment companies in the world with 50 casinos operating in the United States and in five other countries. Its casinos include the famous Caesars Palace and Bally’s Las Vegas. The company operates several well-known casino brands such as Bally’s, Harrah’s, Horseshoe and of course Caesars.
Two new companies
Under the recently agreed Restructuring Support Agreement, Caesars Entertainment Operating Company would enter Chapter 11 bankruptcy and then next month it would have to be reorganized into two new companies. These new companies would most likely consist of one to run the casinos and casino resorts and the second company would own the actual casino structures. However the relevant gaming boards would have to approve the setting up of the new companies so it may be April of next year before Caesars Entertainment Operating Company is restructured.
On-going court cases against Caesars
While Caesars may have the necessary support from its first lien bond holders to restructure it is facing court action from other creditors. These second lien creditors will not be ensured an almost complete return of their investment which is on offer to Caesars’ first lien bondholders. There are on-going cases against Caesars by several creditors who have made claims that the company is in default. They have two grievances; they claim that Caesars moved some of its assets putting them beyond their reach and also that as junior creditors they don’t have the same deal as first lien creditors. The only good news for Caesars Entertainment at the moment is the fact that its subsidiary will enter bankruptcy protection so that it can restructure.