Caesars Entertainment Corporation (CEC) has been granted judicial clearance to restructure the $18 billion debt attached to bankrupt subsidiary Caesars Entertainment Operating Co (CEOC), allowing the company to close its US Chapter 11 court filing.
Gaining approval from Chicago District Judge Benjamin Goldgar, CEC governance will now settle terms and payment structures with CEOC creditors who at the start of January had agreed to drop further legal challenges in order to gain a final settlement.
CEC governance ends two-years of hard-fought legal challenges against CEOC creditors, with Chapter 11 proceedings first entered in January 2015. US business news have reported that the company has spent circa $300 million in multiple legal cases relating to its CEOC unit.
Moving forward CEC will now form a new business entity with Caesars Acquisition Company (CAC) in which it will operate its US casino and hotel properties. The company is committed to paying $10 billion of CEOC retained debt.
Caesars private equity backers Apollo Global Management and TPG Capital will retain a 16% ‘collective’ stake in the new business.
Closing its Chapter 11 proceedings, CEC governance stated that the company had reached an important milestone and that the new business would focus on restoring its gambling assets of Harrah’s, Caesars and Horseshoe casinos.
Issuing a corporate statement, Mark Frissora, President CEO of Caesars Entertainment commented on the company’s future; “The new Caesars will be a stronger company with a healthy balance sheet, a plan for growth and investment, operating discipline and a relentless focus on employee and customer satisfaction,”
“Upon CEOC’s emergence, we will be positioned to strengthen our financial and operational performance by pursuing new opportunities to invest in and expand our brands and business. While there is still much work ahead to complete this process, we are excited about the future of the Caesars enterprise.”