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Caesars said to revive plan talks as bankruptcy probe looms
[NEW YORK] Caesars Entertainment Corp restarted talks with the senior-most lenders of its bankrupt unit as the casino company tries to win creditor support ahead of a court investigation that's expected to be completed as soon as November, according to three people with knowledge of the discussions.
Advisers to Caesars and some of the largest holders of the subsidiary's US$5.35 billion of term loans met on Tuesday after formal talks broke down on Sunday, said the people, who asked not to be identified discussing the private meetings. The lenders disagree on conditions that the company must meet before they would sign on to a restructuring plan, the people said.
Three of the Caesars unit's loans rose Friday to their highest levels in two months. The largest one, a US$2.3 billion obligation due March 2017, climbed more than 0.6 cent to 91.2 cents on the dollar, according to price quotes compiled by Bloomberg.
The bankruptcy probe, which is being led by former federal prosecutor Richard Davis, is examining actions taken since Apollo Global Management LLC and TPG Capital took Caesars private in 2008. He will advise the court on whether any of the transactions could be overturned to the benefit of particular creditor groups.
Caesars has had difficulty gaining support from enough creditors to advance its plan to turn its main operating subsidiary, Caesars Entertainment Operating Co., into a real estate investment trust. While the company has the backing of one set of senior creditors and part of a junior group, it hasn't won over the most-senior lenders or a majority of the biggest junior bondholder class.
Caesars' reorganization plan would cut the unit's US$19.9 billion of obligations nearly in half and create a complex web of new companies, each holding new debt. The casino operator filed for Chapter 11 protection for its subsidiary on Jan 15.