Major casino operator Caesars Entertainment Corp. confirmed on Monday that it will emerge from prolonged bankruptcy by the end of the week. The company was scheduled to host an investor webcast yesterday but canceled it in the wake of a deadly mass shooting during a concert on the Las Vegas Strip that killed at least 59 people and injured more than 500.
Caesars said on Monday afternoon that it will hold the webcast next week or the week after and that it will be able to complete its exit from the Chapter 11 bankruptcy proceeding as scheduled and by October 6.
The gambling operator has already received the green light from shareholders as well as from competent regulatory bodies in the jurisdictions it operates to conclude the move.
Generally speaking, Caesars will be able to emerge from bankruptcy through a merger with one of its subsidiaries – Caesars Acquisition Company. The combined entity will continue managing the operator’s casino operations. A specially created real estate investment trust will assume control over Caesars’ real estate assets. The REIT will be vested to creditors of the major casino and hospitality company.
Caesars received the necessary approval from its shareholders in July and from Nevada gambling regulators in August. The gambling regulators of Missouri and Louisiana gave the company the green light in September. The approval from the latter two was the last hurdle before the company’s exit from bankruptcy. Caesars currently manages Harrah’s, Horseshoe, and Caesars hotel and casino brands, among others.
Caesars’ Almost Three-Year Bankruptcy and What Triggered It
Caesars’ main operating unit Caesars Entertainment Operating Company filed for Chapter 11 bankruptcy protection in January 2015 as a result from a heavy conflict between the company’s creditors and its private equity backers TPG Capital Management and Apollo Global Management.
Here it is important to note that Caesars Entertainment Corp. was formed from a highly publicized 2008 Apollo and TPG buyout. The company’s creditors accused the private equity firms of fraud and asset stripping, which triggered the almost three-year bankruptcy proceeding.
Caesars took almost three years to emerge from bankruptcy due to the incessant bickering of the involved parties and their failure to agree on a restructuring plan. The company’s proposed reorganization was eventually approved by Judge Benjamin Goldgar from the US Bankruptcy Court for the Northern District of Illinois this past January.
Caesars CEO Mark Frissora has said earlier this year that when the company eventually closes its bankruptcy chapter, it will focus its attention on developing empty plots it owns on the Las Vegas Strip and extending its footprint to new jurisdictions. The casino operator eyes expansion in Canada, Brazil, and Japan, which recently legalized casino gambling, but is yet to open its market to interested casino investors. Merger and acquisition opportunities will, too, be explored by the company once it exits bankruptcy.
