Caesars in talks with lenders

That came a day after the company promised its creditors who are first in line a claim on cash held by its debt-strapped subsidiary Caesar's Entertainment Operating Co. in case it defaulted. It's been in formal talks with that group of creditors as well, for about a month.

In recent years the company has spun off multiple divisions in an attempt to shape up its finances, including Caesar's Entertainment Resort Properties and Caesar's Growth Properties, dividing its casinos, properties and businesses among the subsidiaries. The operating company carries the largest debt.

Earlier this year, the company sold the Claridge Hotel Tower of its Bally's Atlantic City property and sold the Atlantic City Country Club to a private buyer. It also closed the Harrah's Tunica Casino in Mississippi in June and shut down the Showboat Atlantic City Casino in September.

For financial analysts watching the debt-heavy operations division that includes Caesar's Palace on the Las Vegas Strip, the company's trademarks and two of its remaining Atlantic City properties as well as other regional casinos, it's not a matter of 'if' but rather 'when the casino company will file for bankruptcy.

Caesar's spokesman Gary Thompson said he couldn't comment, citing the company's SEC-mandated silence before its third quarter financial results are released Nov. 10. However, CEO Gary Loveman has previously told the Las Vegas Review Journal  that the company has no plans for bankruptcy.

Analysts said Caesars' actions could be an attempt to reorganize its finances outside of the federal courtroom or, if that doesn't work, get priority creditors on its side before it inevitably files for bankruptcy.

Alex Bumazhny, a financial analyst with Fitch Ratings, said it's going to be difficult for the company to reorganize its finances out of court or arrange a pre-packaged bankruptcy wrapped in a bow that it can take to a judge.

The tricky part, Bumazhny said,are the creditors who are second-in-line. He said the company owes more than the company is worth to those who are first-in-line to be paid back. That leaves little for those second in line.

Those in the latter position have declared Caesars already in default of its agreements. The company dismissed the contentions in recent securities filings. "It's just hard to see everybody agreeing to a deal without a pretty long bankruptcy proceeding," Bumazhny said.

Chris Snow with CreditSights pointed to USD230 million in interest owed to some of the second-in-line holders of debt in December. He said if Caesars doesn't want to pay up, it likely behooves the company to get the priority creditors on its side now rather than later while it still has attractive cash on hand.

Both analysts said it would be difficult to forecast when the company might file bankruptcy, but Bumazhny said it could be within the year. Snow said it could be imminent or maybe around the middle of next year after the company passes the threshold of time for some transactions that the court would otherwise be able to look back on during its bankruptcy consideration.

The company has 52 casinos in the United States as well as abroad with most bearing the Caesar's, Harrah's and Horseshoe brand. About 68,000 people were employed by the company at the end of 2013.