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CZR must face lawsuits from bondholders

Discussion in 'Casino Industry & Development' started by leo21, Aug 27, 2016.

  1. leo21

    leo21 VIP Whale

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  2. Funkhouser

    Funkhouser In Charge of the Big Door

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    In a nutshell, Caesars illegally moved assets around in a restructuring which reduced the valuation of the corporate assets pledged to bond holders
    and shifted debt Caesars Operating Company. This left 1st tier bond holders with assets worth less then what was guaranteed on bonds and basically screwed 2nd tier bond holders out of any potential recoup of money in a bankruptcy. 2nd Tier bond holders are the ones suing CET.

    The stinker of it (hence the lawsuit), is the private equity firms that acquired CET are trying to walk away from the bankruptcy with a larger percentage of ownership or debt relief which is unheard of in bankruptcies of this size. So second tier bondholders are not going to roll over and take what they feel is an unfair loss. CET feels they didn't do anything illegal in the asset shift and operating company restructuring.
     
  3. vegasvic

    vegasvic VIP Whale

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    I own a chunk of CZR and was thinking about buying more this morning on the big opening dip. I decided not to. It's recovered a little bit the last few minutes but I think I'll just hold on to what I have.
     
  4. hammie

    hammie VIP Whale

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  5. leo21

    leo21 VIP Whale

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    Today's news is a five week shield from litigation:

    http://www.reuters.com/article/us-caesars-bankruptcy-idUSKCN1152GA

    The way this article is written, it sound as if the bondholders not only want to force all of CET into bankruptcy, they also seem to want to get directly at Apollo and TPG. If I understand it correctly, CET is paying a ton of money to them in fees when what it's needed was more capital from them.

    And I stumbled onto this article from last year:

    http://fortune.com/2015/06/05/caesars-losing-las-vegas/

    It's a good overview of what's happened from the perspective of why a private equity deal blew up in the investors faces.