Move to force Caesars Entertainment unit into bankruptcy

Lower-ranking creditors of Caesars Entertainment moved to force the casino company's main operating unit into bankruptcy in an attempt to block a plan they say protects the owners at their expense.

In a filing in US Bankruptcy Court in Delaware, Appaloosa Investment, as well as funds affiliated with Oaktree Capital and Tennenbaum Capital, asked a judge to appoint an examiner to investigate claims that insiders "plundered" the unit, paying themselves hundreds of millions of dollars while moving assets out of the reach of second-lien debt holders.

Caesars has been working on a plan that would put the unit into bankruptcy voluntarily as soon as this week and turn it into a real estate investment trust. The company called the Appaloosa filing a ploy to block that plan and promised a formal response “shortly”. Until then, it’s business as usual at the casinos, Caesars said in a statement.

The involuntary filing threatens to hinder the Las Vegas company’s plans. Caesars last month announced an agreement with some more senior creditors to reorganise the operating unit in bankruptcy and cut its debt to $8.6 billion from about $18.4 billion. That filing could still come, leaving the courts to decide which case to permit, and where. – (Bloomberg )