Caesars Entertainment Operating Company (CEOC), main operating unit of major gambling operator Caesars Entertainment Corp., announced that it had filed an amended reorganization plan together with a disclosure statement and a request to be allowed to extend its exclusive right to propose a new plan to March 15, 2016.
The legal documents were filed to the Northern District of Illinois’ US Bankruptcy Court. The amended reorganization plan calls for a thorough restructuring that is backed by holders of 80% of the operating unit’s first-lien debt. In addition to this, the latest proposed plan provides for comprehensive recoveries for junior creditors of CEOC.
The gambling company also pointed out that it will not be calling for a hearing to be held on the amended plan or the disclosure statement, or at least not for now.
Caesars Entertainment’s main operating unit filed for Chapter 11 bankruptcy protection on January 15, 2015. In April, the company asked for an extension of its exclusivity deadline from May 15 to November 15. However, its request met strong opposition from creditors, first-lien noteholders included. Under a court order, the casino operator can ask for a hearing on the disclosure statement no earlier than December 15.
The requested exclusivity deadline extension will give CEOC the chance to focus even further on its amended plan and to seek additional consensus on the said plan with junior creditors. If it gets the necessary confirmation, the amended plan would settle certain litigation claims for securities and a substantial amount of money from Caesars Entertainment Corp.
What is more, it would improve recoveries across the capital structure of CEOC and would have about $10 billion in the unit’s aggregate debt eliminated. It is important to mentioned that the amended plan calls for restructuring of the corporate balance sheet so that it is tax-efficient. This would happen by turning the company into a real estate investment trust, supported by the parent gambling operator.
Both the proposed amended plan and the disclosure statement are subject to confirmation and approval by the US Bankruptcy Court those have been filed to.
Despite its issues, CEOC pointed out in a statement from earlier today that it has not interrupted its operations throughout the restructuring and that the company’s performance actually improved during the first half of the year. This was attributed to increased hospitality revenue, labor and marketing efficiencies, etc.
