Casinos & Hotels
Caesars Bankruptcy Possible Following Court Ruling
Published:
Last Updated:
A federal bankruptcy judge in Chicago has denied a request from casino and resort operator Caesars Entertainment Corp. (NASDAQ: CZR) to delay creditor lawsuits totaling some $11 billion while the company’s operating subsidiary remains in bankruptcy. The ruling could force Caesars to join its operating company in bankruptcy.
In January Caesars merged with its property acquisition company just before the operating unit filed for Chapter 11 protection. The merger reduced Caesars debt from nearly $23 billion and gave the company some hope of weathering the storm. Private equity firms Apollo Global Management LLC (NYSE: APO) and TPG Capital maintained control of Caesars Entertainment.
The operating unit’s bankruptcy preserved the investments of Apollo, TPG, and other shareholders, but the judge may have forced the parent company into a bankruptcy filing of its own. According to The Wall Street Journal, creditors claimed that Caesars dealt with them unfairly before the operating unit’s bankruptcy filing by moving assets to other affiliates and out of creditors’ reach. The judge’s ruling has upheld the creditors’ claims.
This ruling has absolutely killed the share price, falling nearly 60% at one point. Shares traded down in the last half hour of trading on Wednesday at $5.00 in a 52-week range of $3.01 to $17.50.
Apollo Management’s stock is down nearly 4% at $21.01 in a 52-week range of $20.02 to $28.18.
ALSO READ: The Most Expensive Town in Each State
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.