Chicago is the city where the legal battle between junior and senior creditors of Caesars Entertainment’s bankrupt operating division should be resolved, according to the Reuters report of a ruling by a Manhattan federal judge.
Various elements of the case involving the operating division of the giant casino resort company have been under nearly constant review in courtrooms in Chicago and New York since January. The case is full of unique features as the corporate parent Caesars Entertainment attempts to restructure a debt loan of about $18 billion.
Most recently, senior creditors led by Credit Suisse had tried to pursue a suit against junior creditors. U.S. District Judge Shirs Scheindlin said it would be more efficient to send the Credit Suisse case to Chicago.
The January Chapter 11 filing in Chicago has been marked by bitter feuding as the junior and senior groups try to protect as much as possible of their respective investments in Caesars. The crushing debt load was created in large part when two private equity groups put up about $7 billion and borrowed the remainder of what was needed to take the company private in 2008.
Their timing could not have been any worse, coming as it did about the time the Great Recession, as it has come to be called, put an end to the type of discretionary spend by consumers that made the buyout plan seem reasonable.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: [email protected].