Caesars seeks more time to control bankruptcy case

In a Wednesday filing with U.S. Bankruptcy Court in Chicago, Caesars requested until Jan. 15, 2016, to solicit votes on any proposal it files.

Without an approval from Judge A. Benjamin Goldgar, Caesars’ exclusive period to file a plan would run out May 15, and the time to solicit votes on such a proposal would run out July 14.

Such a request is common in bankruptcy cases, especially ones as complicated as that of Caesars. Companies have a 120-day exclusive period to start their case, but can request extensions, which judges typically approve.

“These Chapter 11 cases are also among the largest and most complex ever filed,” Caesars said in the filing.

Among the properties included in the bankruptcy filings are most of the Caesars Palace Las Vegas, two casinos in Atlantic City, N.J., and a dozen Harrah's or Horseshoe casinos in smaller U.S. markets such as Tunica, Miss., and Reno, Nev.

Caesars has already filed a reorganization proposal, but an independent examiner is now probing the company’s prebankruptcy transactions with non-bankrupt parent company Caesars Entertainment Corp. CEOC said in its filing that most parties want to wait until the report is finished before deciding on the current proposal.

“These cases are in their early stages and numerous outstanding contingencies could have a significant impact on the terms of the plan or a new plan proposed by the debtors,” Caesars said in the filing, noting the examiner’s probe could take at least six months. A hearing on the matter is set for April 29.

Last month, Judge Goldgar approved the appointment of Richard Davis as independent examiner in the case.

His job is to conduct a wide probe into prebankruptcy transactions made between CEOC and its parent. In several lawsuits, creditors have said Caesars entities shifted good assets away from them to benefit its owners, including private-equity firm Apollo Global Management LP. At least seven transactions between 2009 and 2014 have been questioned.

Caesars has said the transactions were proper, designed to manage and improve CEOC’s debt load and liquidity. Judge Goldgar ordered Mr. Davis to look at any transactions or “apparent self-dealing or conflicts of interest” for which creditors might bring claims against Caesars, including current and former officers of Caesars. His findings could substantially change Caesars’ current proposal. The current proposal calls for Caesars’ parent to pump in $1.5 billion as part of a deal to restructure CEOC, which would be reshaped into a real-estate investment trust and a management company. Senior lenders support the deal, while more junior creditors, including a group of second-lien holders that is suing, oppose it.

In January, CEOC and nearly 175 affiliates filed for bankruptcy in Chicago after a group of the second-lien holders filed an involuntary bankruptcy petition against the entity in Delaware. A Delaware judge later kicked the entire case back to Chicago, Caesars’ preferred venue.