Caesars ‘stripped assets’ from ailing CEOC - inquiry

Caesars ‘stripped assets’ from ailing CEOC - inquiry

Wednesday, March 16, 2016 Totally Gaming

An inquiry into the bankruptcy of Caesars Entertainment Operating Company (CEOC) has found that Caesars Entertainment stripped assets from its ailing arm.

Court-ordered examiner Richard Davis and a team of lawyers spent a year probing whether Caesars, under the control of Apollo Global Management and TPG Capital, removed prime properties such as the LINQ Hotel & Casino in Las Vegas and left the company unable to pay a mountain of debt.

"The simple answer to this question is 'yes'," wrote Davis at the start of an 80-page summary of his non-binding investigation, which was published on Tuesday.

CEOC’s $18bn (€16.3bn) bankruptcy claim has pitted some of the biggest names in US finance against each other in a year-long court battle. Junior creditors, led by the Appaloosa Management hedge fund, have alleged CEOC was picked clean of its best hotels and casinos for the benefit of Caesars Entertainment, as well as Apollo and TPG.

Davis estimated potential damages for claims that he said would have a better than 50 per cent chance of success in court ranged from $3.6bn to $5.1bn.

In a statement reported by Reuters news agency, Apollo said: "We believe that Apollo...acted appropriately and in good faith to help CEOC strengthen its capital structure.”

Last month Judge Benjamin Goldgar decided to stay a bondholder lawsuit against the casino operator over the issue. The judge said the stay would be lifted either on May 9 or 60 days after Davis' report is published.

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