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Caesars Bankruptcy Thoughts

Discussion in 'Misc. Vegas Chat' started by tucsonkim, Jan 16, 2015.

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  1. tucsonkim

    tucsonkim Tourist

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    What are everyone's thoughts on Caesars bankruptcy. I received the following email:

    "As you may have heard, a Caesars Entertainment subsidiary1 and some related business units have filed for reorganization under Chapter 11. The reorganization is part of our efforts to ensure our long-term success and our ability to deliver world-class entertainment to you for many years to come.

    We want to assure you that Total Rewards®remains the same, and we are here to stay.

    As you are one of our most valuable guests, the following are a few important details that we want to make sure you are aware of as you visit our resorts and casinos:

    Business as usual at all Total Rewards resorts and casinos

    We are open for business and will continue to operate as usual

    Total Rewards remains the same

    You will continue to receive offers and comps from your favorite resorts and casinos
    Your Reward Credit balance remains in place
    The Tier Status you have earned for 2015 stays in place
    You will continue to earn Tier Credits and Reward Credits for all of your activity
    Daily Tier Credit Bonuses will remain the same through 2015

    Your hotel and event reservations are secure

    Our employees are here to serve you

    Plus, here’s the really exciting news! We would like to take this opportunity to give you MORE!

    Through March 31st, 2015, we are giving you a 50% bonus on the first 50,000 Tier Credits you earn! So, you could walk away with up to 25,000 EXTRA Tier Credits to count towards your Tier Status, and we even started counting on January 1st.*

    Thank you for your continued loyalty. We will keep doing everything we can to offer you the best casino loyalty program.

    See you soon!"

    I fear that they are desperate to keep players playing before drastic changes happen. What are your thoughts?
     
  2. saeldway

    saeldway Low-Roller

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    Thoughts?

    Having been both involved in bankruptcy restructuring for a good period and a longtime market investor; I told my wife the day CZR went public it was a well-orchestrated strategy to bilk public market investors out of billions of dollars, that it would end in bk a few years down the road, and here we are. It's not that I have predictive powers. Most anybody that paid attention to the TPG deal in 2007 could see this coming. I thought they should file in 2009 about the time MGM was on the verge. Instead, they hatched a scheme to shift CZR's losses onto pension funds and market investors. Loveman, the firm that put together the IPO, and several others should be behind bars. I never invested in the stock as I don't have a death wish with my money but I get worked up when companies do sleazy things, giving bad names to tons of good ones. It also puts a stain on the many good individuals/companies that do the right thing and still find themselves in BK for one reason or another.

    Nothing will change operationally other than maybe the sale of a property like the Rio. The CET casinos will continue to ply us with alcohol, give us 6/5 BJ, and run Loveman's fat face on room screens about acting responsibly.

    I also think this should get moved to the Industry topic page.
     
  3. BCMike

    BCMike VIP Whale

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    I actually did by the stock fairly recently (within the last 2 months). I'm probably the lucky person. I got in at just over $8 a share and sold enough when it got to $14 to break even with a small profit. I'm still holding some shares if it. I would call my tolerance level highly aggressive but I also didn't put 'life changing' money into it.

    My personal opinion is they're too big to fail and something will get worked out although there's already a bunch of lawsuits around this one. Some of the asset moves that they did I also find very suspect...

    I personally hope their filing works out like aamrq (American airlines) did. I also bought that during bankruptcy.
     
  4. lithium78

    lithium78 High-Roller

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    I do most of my gaming in Atlantic City, so considering that both Caesars AC and Bally's AC are part of the unit that is going through bankruptcy, I am a little concerned. Word on the street is that CET is going to either close Bally's outright or absorb it into Caesars AC, so that will mean fewer hotel rooms in AC and fewer places to play. That might somehow be good for CET's bottom line -- although I don't see how since when they shuttered Showboat the players went to competitors instead of their other casinos -- but it's definitely bad for players.
     
  5. Guardian

    Guardian Low-Roller

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    This is the part of the email that I liked:
    Through March 31st, 2015, we are giving you a 50% bonus on the first 50,000 Tier Credits you earn! So, you could walk away with up to 25,000 EXTRA Tier Credits to count towards your Tier Status, and we even started counting on January 1st.*

    Makes it a lot easier to become Diamond.
     
  6. sco5123

    sco5123 VIP Whale

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    On a side note, are they thinking of closing Harrahs Atlantic City?
     
  7. lithium78

    lithium78 High-Roller

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    Harrah's AC was moved to another subsidiary of CET that is not affected by the bankruptcy, so it should be fine. Harrah's is CET's most profitable casino in AC and it's the second most profitable casino in AC after Boyd/MGM's Borgata. Caesars AC is CET's second most profitable casino -- and third most profitable casino overall -- in the AC market, but Gary Loveman has already made comments about how Bally's AC isn't making them enough money.
     
  8. Scottndindy

    Scottndindy Low-Roller

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    Someone correct me if I am wrong but I do not think the profit of any of the Atlantic City Casinos has much to do with the pending bankruptcy and determination to close or not close. If a casino is in the non bankrupcy company but not performing they will close it. I believe this bankruptcy was structured to reduce outstanding debt levels as much as possible. The profit/loss of an individual property is secondary to their debt level.
     
  9. zignerlv

    zignerlv Low-Roller

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    The stock isn't too far from where it was the week it went public in 2012, and the IPO price, when issued, was around $9/share, so while you were right about the bankruptcy part, the bilking investors out of billions of dollars wasn't.
     
    Last edited: Jan 17, 2015
  10. zignerlv

    zignerlv Low-Roller

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    I would think not when they are in the middle of building a $126 million conference center there.
     
  11. saeldway

    saeldway Low-Roller

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    Since when has stock price been the sole determination of value? The stock transaction and the subsequent bk filing were set up so EVENTUALLY TPG and Apollo would make out at the expense of everybody else. To answer the other question as to what's being kept/lost, vegastripping had a good article recently:

    http://www.vegastripping.com/news/blog/5469/caesars-entertainment-declares-bankruptcy-or-see-lovemans-new-haircut/
     
  12. LolaDoggie

    LolaDoggie VIP Whale

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    I really need somebody to sit me in their lap and explain to me how Gary Loveman has kept his job all these years.
     
  13. jbk1972

    jbk1972 Low-Roller

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    I was getting ready to book an offer for Harrah's in Vegas for 6 nights for only $200. Since the announcement it jumped to $360. Has anyone else noticed a difference in the offers? Funny thing is that I usually use Orbitz or Vegas.com, but the original offers would have saved me like $200 on the trip, but now it is identical to what I would pay if I just went through the package sites. So, the "offers" really are worthless now.
     
  14. leo21

    leo21 VIP Whale

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    I'm with you on this. It would be a shame if there weren't management changes as part of the process.


    From the other threads, it's sounds like they have changed some of their philosophies on offers. However, if my observations of Total Rewards are accurate, this is also a time of year where they reevaluate folks. I don't know if it's the bankruptcy or something else to blame.
     
  15. jbk1972

    jbk1972 Low-Roller

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    Funny thing is I was just out there and dropped a lot of cash. I have gotten better offers while spending less before. My original offer really wasn't even that great. I think they knew this was coming a long time ago.
     
  16. wigwam_salesman

    wigwam_salesman VIP Whale

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    The bad news:

    1) Nobody is too big to fail - see Kodak for a working example of this
    2) Operational management at CET is almost laugh out loud bad

    The good news:

    1) Companies like CET are split across loads of operating divisions that are operated independently. Just because one part goes into chapter 11 doesn't mean the whole castle is falling down
    2) They are leveraging against Caesars Palace. This is a sensible move. It shows investors that they have confidence in their core offering. If they start selling off smaller assets like Michael Jackson then it's time to worry.
     
  17. sco5123

    sco5123 VIP Whale

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    :nworthy:
     
  18. shokhead

    shokhead I'm no big spender!

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    Here we go again!
  19. bswim

    bswim High-Roller

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    They started moving properties around between business's internally last summer. The writing has been on the wall for a while.
     
  20. shokhead

    shokhead I'm no big spender!

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    HARRAH'S AND HARVEYS: A timeline

    1937: Pasadena, Calif., native Bill Harrah opens a bingo parlor in downtown Reno. It closed two months later.

    1938: Harrah opens another Reno bingo parlor, starting what would become over the next four decades under his guidance, a gaming and entertainment empire known worldwide.

    1944: Harvey Gross opens Harveys Wagon Wheel casino at the south shore of Lake Tahoe.

    1963: Gross opens the first high-rise hotel in the Tahoe Basin which became the 11-story Harvey's Resort Hotel at Stateline.

    July 1967: Harrah announces plans for a high-rise hotel in downtown Reno to be built on the site of the former Golden Hotel on Center Street.

    Oct. 1969: Harrah's Hotel, at 24 stories, 326 rooms and $5.6 million, opens in downtown Reno, surpassing Arlington Towers as Reno's tallest structure. The first guest is Lou Labonte, an Auburn, Calif., restaurateur and longtime friend of Bill Harrah.

    April 1972: Harrah's, which went public in Oct. 1971, begins trading shares on the American Stock Exchange. Bill Harrah remains majority shareholder.

    Nov. 1973: Harrah's opens its 18-story, $27 million, 250-room Harrah's Tahoe hotel, described as "rustic elegance," above the casino Bill Harrah had operated since the 1950s at Stateline. A 290-room expansion was added in 1975.

    June 30, 1978: Bill Harrah dies at age 66 after heart surgery in Rochester, Minn., leaving behind a $161 million Northern Nevada hotel-casino empire.

    Feb. 1980: Harrah's and Holidays Inns shareholders approve $311 million merger with Harrah's becoming a wholly-owned subsidiary of the Memphis-based hotel chain.

    Aug. 27, 1980: A bomb, estimated at more than 1,000 pounds, explodes inside Harvey's Resort Hotel-Casino, across Highway 50 from Harrah's Tahoe, in a $3 million extortion plot in which no one was hurt but damages were estimated at $13 million. Mastermind John Birges Sr., a high-stakes gambler who reportedly owed the casino $15,000, died in a Nevada prison in 1996.

    1981: A 240-room hotel tower addition opens at Harrah's Reno.

    Nov. 3, 1983: Harvey Gross, 78, dies while recuperating from a stroke at his Palm Springs, Calif., condominium.

    1987: Bill's Casino Lake Tahoe, a small gaming-only enterprise named for the company founder, opens near Harrah's Tahoe.

    1990: The Promus Companies Inc., retains the gaming assets and brands of Holiday Inns and a year later moves headquarters from Reno to Memphis.

    1995: The company is renamed Harrah's Entertainment Inc., and expands its gaming empire to several other states over the next 10 years.

    2001: Harrah's acquires Harveys Casino Resorts, including Harveys Resort & Casino at Tahoe and two properties in Iowa.

    2005: Harrah's completes acquisition of Las Vegas-based Caesars Entertainment Inc., for more than $5 billion and is then acquired by several private equity firms and taken private.

    2010: Bill's Casino Lake Tahoe closes.

    2010: Harrah's Entertainment name is changed to Caesars Entertainment Corp.

    Jan. 15, 2015: Saddled with $18.4 billion in debts, Caesars' Entertainment Operating Co., with more than 40 casino properties, files for Chapter 11 bankruptcy protection and says properties will continue to operate.
     
    Here we go again!
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