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It's Official, CET formally files for Bankruptcy

Discussion in 'Casino Industry & Development' started by Funkhouser, Jan 15, 2015.

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  1. Funkhouser

    Funkhouser In Charge of the Big Door

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  2. Funkhouser

    Funkhouser In Charge of the Big Door

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    Next question is which jurisdiction the proceedings take place in. Delaware or IL? Hold on to your hats people, this one is going to be a long bumpy ride.
    I expect to see a couple of las vegas properties remodeled and Wynn Everett opening long before this one is settled.
     
  3. mrstealth

    mrstealth High-Roller

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    This is actually a very good thing to officially get this settled, and if it works out, they will emerge in fairly good shape, but they will have to combine everything back into one company to satisfy everyone.. It appears they have negotiated a deal with the primary bondholders, but the secondary ones is where the problem is going to be.

    The bottom line is I don't really expect to see any real effect on day to day operations, for sure not anytime soon.
     
  4. Big Tip

    Big Tip VIP Whale

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    I hope the courts make them do away with 6/5 blackjack and force them to comp table game players better!
     
  5. Funkhouser

    Funkhouser In Charge of the Big Door

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    Personally I would like to see a break up of CET. Too big to fail? No way. The MGM / CET monopolies in Vegas have soured me. I long for a strip full of multiple independents.
    Good healthy competition. There is nothing CET is selling these days that would keep me loyal to their brand. The great Total Rewards system and turning of the comp screw makes me feel like, screw um, let the creditors eat em alive.

    13 years of brand loyalty is enough for me. I anxiously await to see what the other players on strip come up with. Blackstone, Resorts, etc.
     
  6. mrstealth

    mrstealth High-Roller

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    LOL, how did MGM get dragged into this ? they are actually stronger now then ever. And as far as "breaking up CET", if anything, it will emerge from this much stronger than ever as almost half the debt will be shed.

    And I hate to burst your bubble, but Blackstone is not a "player", it's a REIT/investment group same as Apollo who is behind CET.
     
  7. phade

    phade Low-Roller

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    If somehow a split was ordered, what factors would determine where the lines were drawn as to the casinos that would break out. Would it be an all or nothing propositions? I'd asumme not, because unless I am mistaken, don't some of the actual hotels/casinos have different creditors?

    Also, what does MGM want to happen? I have to assume they want a few hotels/casinos to be split off that they would go after, yet still have a smaller, leaner CET come through as a distant second competitor? I would think they wouldn't want a complete break-up of CET, but maybe I'm not thinking that through correctly.
     
  8. M0rtyC

    M0rtyC Low-Roller

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    Wynn in Mass opened before CET chapter 11 resolved? Wynn will be lucky to open before 2021.:poke:
     
    Bonus early day Downtown
    Annual end of the rodeo trip
  9. nostresshere

    nostresshere Mr. Anti Debit Card

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    If I was MGM, I might like to see CET broken into some parts. Sure, that would mean more competitors, but smaller ones. MGM would continue as a mega player. And many customers like the idea of having multiple places to play, stay, spend and earn loyalty points. There are a large number of people that focus on either CET or MGM and ignore most of the others.
     
  10. Funkhouser

    Funkhouser In Charge of the Big Door

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    Sorry, I should have been clearer. Blackstone still has an operator of its hotels and casinos, personally it does matter (except with capital re-investment) who owns these places. Just who's running them and on the front line to the guest. CET's problem is it has another subsidiary of itself, full of bad management running the joints. This won't fix their problems no matter how much debt they shed. They have front line employee and policy issues in their operations, ones not as prominently seen with their competitors. All you have to do is get around the country and experience other casino brands.
     
  11. Grid

    Grid VIP Whale

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  12. shiny

    shiny Low-Roller

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    Just wonder what is the price tag for Octavius Tower (the newest one of CET's upscale tower)?
     
  13. Funkhouser

    Funkhouser In Charge of the Big Door

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    Well it opened in Jan 2012 for $375-million with 668-rooms. Roughly 561K per room, with depreciation and interest. Maybe you could pick it up for $340 million or so.
     
  14. keno60

    keno60 VIP Whale

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    They should have to sell their assets to pay their debts!! Instead they are robbing their vendors and creditors! For most of us, we would wind up in jail for this.
     
  15. LolaDoggie

    LolaDoggie VIP Whale

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    Gary Loveman must be the genius they say he is after all. Get dang near $20 billion worth of stuff for $10 billion and stay out of jail, and keep your job and maintain a full head of hair.
     
  16. Brewfangrb

    Brewfangrb Low-Roller

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    The end of your statement isn't true. People file personal bankruptcy everyday and even under today's tougher bankruptcy laws, can still largely discharge all their unsecured debt (except student loans) without having to sell anything. Unless you own Picassos or 20 Piagets, you're not likely going to have to sell any personal property. Those bondholders are unsecured creditors and accepted this potential outcome as one of the risks of investing. Does it suck that CET ran itself the way they did and this happened? Of course. But when you invest in debt like this, you have to know this is the risk.
     
  17. DReynolds86

    DReynolds86 Come On, You Blues!

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    [​IMG]
     
  18. oc_guy

    oc_guy Low-Roller

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    For those that think their rewards are gonna vanish overnight, this is from an email that just went out:


    "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."
     
  19. Grid

    Grid VIP Whale

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    There is a thread on this email already. It doesnt say anything about them NOT reducing comps. It just says the doors will stay open and they will give you a 50% bonus on TC's. Lets be honest, tier credits dont cost them mush of anything and it will just make us gamble more for the precised value of moving up a little faster. Which will be offset by gambling more and losing more to chase the cheese. If they wanted to offer a bonus on Reward Credit thats a different story...
     
  20. Kickin

    Kickin Flea

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    This is not really true either. Under personal bankruptcy most secured debt is discharged (like mortgages, car loans, etc) because the creditor can at least seize the asset. As far as things like the Picassos those would likely be considered non-exempt and would be liquidated, not all personal property can be kept. And while there is a lot of unsecured debt that can be discharged like credit cards there are unsecured debts besides student loans that can't be, like back taxes and alimony. So its not as clear cut as just unsecured vs secured.

    The process CET used of splitting a company up into a good unit (NewCo) and bad unit (OldCo) is nothing new, its one of the first steps in most reorgs. But equity components of the NewCo are typically transferred to all creditors of the OldCo as part of this swap. CET's capital structure is such a mess with assets cross-collateralized to different tranches of debt that it makes it almost impossible for them to do this in an equitable way. Also, courts have often sided with unsecured creditors when it comes to the claim on a company's cash flows. This was a central part of the fight in the first distressed restructuring I was ever involved in, when I really didn't know anything about how it works and was just absorbing everything that was going on. We were part of the steering committee for unsecured bondholders for a company in Asia (with US dollar bonds issued under NY law) and the courts ruled that while the secured bank lenders had priority claim to the assets of the company, they didn't have priority to its cash flows. This is a central part of the argument unsecured creditors are making in the CET case as well, and frankly the unsecured creditors in this case are some of the best distressed shops in the US and they wouldn't be filing this claim if they didn't have a strong case.
     
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