A court-appointed examiner’s report, ironically published on the Ides of March, discovered evidence of asset-stripping in Caesars bankruptcy reorganization.
Caesars could face billions of dollars in potential damages in relation to its bankruptcy restructuring, in line with the recommendations of a court-ordered examiners’ report, posted Tuesday.
The business is seeking chapter 11 bankruptcy because of its chief operating unit, CEOC, so as to reorganize $18 billion of its debt, it is facing opposition from the junior creditors.
Ex-Watergate prosecutor Richard Davis led a team of solicitors which spent an investigating the casino giant’s corporate dealings year.
Their aim: to determine whether, as alleged, the company fraudulently transferred many of CEOC’s prime assets to Caesars Entertainment and other subsidiaries for the advantage of its controlling private equity backers, while placing them away from the reach of the junior creditors.
This form of asset-stripping left CEOC with nothing but assets that are distressed a failure to pay for its debts, argues a group of creditors led by the Appaloosa Management hedge fund, which can be suing Caesars.
CEOC Possibly Insolvent as Early as 2008
The investigation team poured over 80 million pages of papers to produce its 80-page report. But ultimately it all boiled down seriously to one word.
‘ The answer that is simple this question is Continue reading “Caesars Faces Billions in Claims, Research Finds Evidence of Private Equity Asset-Stripping”