Caesars Entertainment Operating Co. (CEOC) recently asked a US bankruptcy judge through a legal representative for a temporary halt to the lawsuits against its parent company.
The casino operator asked for the action so it can complete negotiations with creditors to restructure the company.
CEOC filed for bankruptcy to the tune of $18 billion, and reported that it is progressing in its negotiations with different creditors to reorganize the casino, including a $4 billion contribution from its parent; Las Vegas based Caesars Entertainment Corp.
The contribution is significant in reviving the estate, but the asset is under threat from impending promulgations in New York and Delaware courts. Several hedge funds, which are creditors in the bankruptcy case, filed lawsuits against the parent firm, seeking around $11 billion in damages. The hedge funds alleged that the parent company reneged on guarantees on bonds issued by CEOC.
A CEOC adviser said in a report that an adverse ruling could topple the parent, Caesars Entertainment. CEOC lawyer David Zott asked in his closing arguments in U.S. Bankruptcy Court in Chicago to let the company “finish the job” of reorganising the casino.
An independent examiner said in March that Caesars and its private equity sponsors could be held liable for $5 billion in potential damages from the unit’s bankruptcy.
The New York Court is expected to rule on the almost $8 billion claims against Caesars between June 24 to July 22.
