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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Caesars stock hits 52-week low as company seeks to stop bankruptcy litigation

8 June 2015

The stock price of Caesars Entertainment Corp. sunk to a 52-week low Friday as investors worried about the outcome of legal proceedings in federal bankruptcy court, which could leave the casino operator on the hook for more than $1 billion in debt obligations.

A decision against the company could force Caesars to follow its largest operating division into bankruptcy protection.

Shares of Caesars closed at $6.41 on the Nasdaq Friday, down 75 cents, or 10.54 percent. Year-to-date, shares of Caesars have declined more than 53 percent, including a drop of 30 percent over the past three months. Shares of Caesars dropped to a 52-week low of $5.95 Friday, before recovering.

Caesars placed Caesars Entertainment Operating Co. into a pre-packaged Chapter 11 bankruptcy in January. On Wednesday, a hearing began in Chicago where Caesars is seeking to halt bankruptcy litigation against the company that could derail the restructuring process.

Creditors want to advance four separate lawsuits against Caesars over the transfer of assets to its operating unit.

Last week, a federal judge in New York handed a small victory to creditors seeking to collect $750 million from CEOC, saying the trustee representing CEOC creditors can ask her to rule on parts of the lawsuit without first holding a trial.

A favorable ruling could force Caesars Entertainment into bankruptcy because of its liabilities.

Caesars Entertainment has a gaming industry high $22.8 billion in long-term debt, of which $18.4 billion is attached to CEOC. Through bankruptcy, the company hopes to eliminate almost $10 billion of the division’s debt and convert CEOC into a real state investment trust.

CEOC controls Caesars Palace, Caesars Atlantic City, Harrah’s Reno Casino and Hotel, and more than a dozen regional properties.
Caesars stock hits 52-week low as company seeks to stop bankruptcy litigation is republished from Online.CasinoCity.com.