Caesars second amended disclosure statement OK’d by bankruptcy court

By Caroline Salls

Pittsburgh, June 29 – Caesars Entertainment Operating Co. Inc.’s (CEOC) disclosure statement for its second amended plan of reorganization was approved on June 28 by the U.S. Bankruptcy Court for the Northern District of Illinois.

Specifically, the court said in the order that the “disclosure statement is approved as having adequate information pursuant to Section 1125 of the Bankruptcy Code.”

A scheduling order entered last week said CEOC’s plan confirmation hearing will begin on Jan. 17, 2017.

Support agreements

As previously reported, Caesars Entertainment Corp., CEOC and some holders of CEOC’s 10¾% senior unsecured notes due 2016 and 10¾%/11½% senior toggle notes due 2018 entered into a restructuring support agreement.

Under that agreement, holders of the subsidiary guaranteed notes claims will receive a share of $116.81 million in new Caesars convertible notes and 4.122% of new Caesars common equity.

To the extent CEOC is successful in its objections related to claims for unmatured interest asserted by the indenture trustees for holders of its second-lien notes and some classes of creditors receive an increased recovery as a result under the CEOC plan, the recovery for holders of subsidiary guaranteed notes will increase by the same percentage and a reduced claim adjustment under the CEOC plan for second-lien noteholders will be further adjusted accordingly.

Holders of first-lien notes claims and pre-bankruptcy credit agreement claims would waive their rights to turnover under a subsidiary guaranteed notes intercreditor agreement.

Caesars and CEOC also entered into a restructuring support, settlement and contribution agreement in connection with the restructuring, including the merger of Caesars Acquisition Co. (CAC) with and into surviving entity Caesars.

As part of that agreement, Caesars agreed to take, and cause its controlled subsidiaries other than CEOC to take, all actions necessary for the CEOC plan to take effect, including the issuance of $1 billion of new Caesars convertible notes, the issuance of up to 52.7% of the new Caesars common equity and the completion of any new Caesars capital raise to fund its contributions to the CEOC plan.

A definitive merger agreement will also include a new Caesars operating company stock purchase for $700 million in cash and a new Caesars property company common stock purchase, if applicable, for $91 million in cash.

Creditor treatment

Holders of first-lien notes claims will receive a combination of cash, notes, preferred stock and new debt.

Holders of second-lien notes claims, subsidiary guaranteed notes claims, senior unsecured notes claims, unsecured claims, insurance-covered unsecured claims and general unsecured claims will share in $1 billion of new Caesars convertible notes, which will be convertible for up to 12.2% of new common equity, as well as operating company series A preferred stock, which will be exchanged for up to 24.4% of new common equity.

Holders of CEOC interests will receive no distribution.

Caesars is a Las Vegas-based casino-entertainment company that filed for bankruptcy on Jan. 15, 2015 in the U.S. Bankruptcy Court for the Northern District of Illinois. The Chapter 11 case number is 15-01145.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.