Caesars denied protection from creditors, facing billions in claims

By Kali Hays

New York, July 22 – Caesars Entertainment Corp. (CEC) will not be able to avoid lawsuits from several creditor parties related to the Chapter 11 case of Caesars Entertainment Operating Co., Inc. (CEOC) with a Wednesday order from the U.S. Bankruptcy Court for the Northern District of Illinois.

According to an 8-K filed Wednesday with the Securities and Exchange Commission, the court denied the company’s request for an extension of the automatic stay or to enjoin creditor lawsuits until CEOC’s Chapter 11 plan became effective.

In March, CEOC filed for an injunction against creditors that have filed lawsuits against CEC and former company directors claiming breach of fiduciary duty and “corporate waste.”

As previously reported, the creditors include BOKF, NA, Wilmington Savings Fund Society FSB, Meehancombs Global Credit Opportunities Master Fund LP, SB 4 CF LLC, CFIP Ultra Master Fund, Ltd, Trilogy Portfolio Co., LLC and Frederick Barton Danner.

Lawsuits filed by the creditors accuse CEC of fraudulent transfers and aiding and abetting breach of fiduciary duty by its directors and ask that the court enforce CEC’s guarantee of notes issued by CEOC.

BOKF is demanding payment of $750 million in obligations related to CEC’s 12¾% second-priority senior secured notes due 2018 issued under an indenture in April 2010 by CEOC.

In a similar action, Wilmington Savings is demanding payment of $3.68 billion in obligations related to CEC’s 10% second-priority senior secured notes due 2018, also issued under an indenture with CEOC.

CEC said that the “lawsuits are without merit” and that it will “continue to vigorously defend against such claims,” according to the 8-K.

Caesars is a Las Vegas-based casino-entertainment company that filed for bankruptcy on Jan. 15, 2015. The Chapter 11 case number is 15-01145.

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