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CET Reaches Agreement with Top Tier Lenders

Discussion in 'Casino Industry & Development' started by mrstealth, Aug 22, 2015.

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  1. mrstealth

    mrstealth High-Roller

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  2. lithium78

    lithium78 High-Roller

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    Everything is going to work out just fine for CET in the end. I've been predicting this since last year. They are too big to fail.
     
  3. Someone

    Someone High-Roller

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    I have to disagree

    this story is not news at all they have always had an agreement with their "top tier lenders" this is like people that are getting a sweetheart deal going back into a room to renegotiate a sweetheart deal and coming out and saying "we have a deal".....when they had a sweetheart deal all along

    and IMO CET/CZR is too big and too convoluted to not break up and there is little chance the lower level lenders and bond holders are suddenly just going to roll over and accept Apollo and TPG retaining a large chunk of the company while those lower level bond holders get nothing and especially before they even go to court to fight over it which is what they have been preparing for all along

    this announcement was just insiders making a few dollars off of a pump and dump and back to the "same old programming" which is this thing is headed to a long court case

    IMO CET/CZR unwittingly set the break up in motion when they started to cut the company up in chunks and to divide the properties that are revenue positive (outside of massive debt) apart from debt being left on an entity with no real assets

    I do not think the break up will fall along those lines I think the entire group of companies will be pulled into BK and then it will be broken up in pieces

    there is value in the "collective" to a degree, but the issue with CET/CZR is the collective has so much duplication in most markets that the value is diminished overall and it makes it too easy to bust up parts while still leaving other parts together
     
  4. Krh2o

    Krh2o MIA

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    They have a lawsuit from junior lenders about a conflict between the senior lenders also being shareholders. Also the deal for junior lenders will not be accepted as is. This is all algorithm and high frequency induced pop, with some short covering. I would be stunned if the junior lenders get a deal. I still think Bankrupcy is the final stop.
     
  5. zing

    zing Low-Roller

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    It seems like they've announced agreements like this in the past but they need everyone on board to make it happen, and that hasn't been the case so far.

    It's been a long and confusing process. I'd like to see a final resolution but I think we're still months away.
     
  6. Funkhouser

    Funkhouser In Charge of the Big Door

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    I agree with your assessment. CET kinda screwed the pooch here. The precedent was set when they tried to bundle mixed value assets together between the holding and operating company. I doubt a judge handling the secondary bondholder issue is going to let Apollo skate free, without taking a hit. I think all the Horseshoe branded properties get sold off, maybe they peel off some of the lower tier Vegas props to go from Park Place acqusition. I could see CET getting split up into around 3 to 4 entities. The operating company (which keeps player db and WSOP), an REIT with most of the Vegas properties in tact, a split off of Horseshoe entities outside of Vegas, and a split off of the Harrahs brand and AC properties.
     
  7. bobby jones

    bobby jones Low-Roller

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  8. leo21

    leo21 VIP Whale

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    They've never not had cash. They've never had willingness to put that cash into CET to help pay down the debt they created.
     
  9. hammie

    hammie VIP Whale

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  10. lithium78

    lithium78 High-Roller

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    Anybody who goes bankrupt in a business that consists almost entirely of people walking in, emptying their wallets for basically nothing in return, and leaving must be a really terrible businessman.
     
  11. Guy_

    Guy_ Low-Roller

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    While I agree with you to a point.. There has been way to many casinos go bankrupt and close down to make me truly believe it is as easy as it sounds "put up a building with some slots and become rich".

    There is soo many options all over the world now to gamble at. Everyone wants things to be more and more extravagant or they will take there business elsewhere. That costs money. I am pretty sure (altho could be wrong) that MGM has had sectors claim bankruptcy before as well.
    With more and more people going to locations like Las Vegas and bringing a gambling budget of $100 a day (or less), they have to rely even more on ways to bring people into the resorts such as nightclubs and other expensive extras.

    Bottom line is, "If you build it they will come" only works for the first few months and then you are still millions (if not billions) in debt. it costs a butload of money to keep the doors open for a casino. If they are run well they can definitely make a fortune! But one small misstep can also they them back significantly
     
  12. leo21

    leo21 VIP Whale

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    And if the bankruptcy was about the casino business, I would agree with you. This particular bankruptcy is about how private equity firms can run even good businesses into the ground. I know folks like to blame comps or the recession for the troubles on the strip but don't ever forget that CET's debt came from being bought by the private equity firms who financed it by dumping the debt on CET and take the cash off the top in management fees before they pay any bills. And for that matter, MGM's troubles come from building City Center, because they sure as hell want you to think it's from having to compete with other casinos for gambling customers.
     
  13. hammie

    hammie VIP Whale

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    Agreed. Apollo borrowed money and bought Caesars at the height of the market, took on too much debt that the business could not service it. They tried to play a shell game by moving distressed assets into a separate company so as to shield profitable business units from bankruptcy. Looks like the judge will frown upon this (alleged) asset stripping.

    Sorry, but this is naïve. Trump Entertainment Resorts went bankrupt 4 times. Many other casinos have done so as well: Stratosphere , Riviera......didn't Debbie Reynolds' casino go bankrupt? Las Vegas Hilton? I guess not enough folks walked in and emptied their pockets.
     
    Last edited: Feb 17, 2016
  14. lithium78

    lithium78 High-Roller

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    Well, Donald Trump is a terrible businessman which is why he declared bankruptcy four times. He couldn't turn a profit even with people just handing him their money. He talks a big talk, but he doesn't walk a big walk.
     
  15. azcactus

    azcactus Tourist

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    Lol. Poor guy is a terrible businessman :(
    [​IMG]
     
  16. lithium78

    lithium78 High-Roller

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    Yeah, inheriting money from your dad does wonders for ya. If he wasn't such a terrible businessman, he would be living on his own money instead. But whatever. Spoiled brats can be entertaining in their own childish way.
     
  17. azcactus

    azcactus Tourist

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    Sureeeee. You're just itching to go political :)
     
  18. lithium78

    lithium78 High-Roller

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    The man went bankrupt four times and has about 1/4 of the wealth he should have had with the financial resources he started out his life with. Research has proven that if Donald Trump had simply invested the money he inherited in an S&P 500 index fund and spent his life fingerpainting he would have $6 billion more than he has right now. That's because he's a lousy businessman. Good businessmen don't go bankrupt FOUR TIMES.

    Whenever I hear Trump fanboys, all I can think of is this clip from "Idiocracy":

    [video=youtube;sZHCVyllnck]https://www.youtube.com/watch?v=sZHCVyllnck[/video]
     
  19. azcactus

    azcactus Tourist

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    Whenever? Sounds like you go looking for trouble. No worries . I don't even like Trump.
     
  20. masterwilde

    masterwilde Tourist

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    Ceasers are too big in terms of the complicated business structure they have in place. In a way they are like the country China who in turn have multiple channels/layers. Ceasers has always had an agreement with its teir 1 lenders, it tier 2 and 3 they are having trouble with, thats my understanding anyway.

    If Ceasers declares itself then it will simply rebrand under another name with transfers of assets from all of it current channels
     
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