Caesars gets key reprieve in USD 11B lawsuit

According to Reuters, shares of Caesars had plummeted on Monday after a federal judge in Chicago ruled the company must face lawsuits seeking up to $11 billion.

That ruling had opened the door to the U.S. District Court hearing on Tuesday in New York. The bondholders had asked the judge to enter an order in their favor, and Caesars had warned an adverse ruling could force it into bankruptcy.

However, early on Tuesday the New York summary judgment hearing was postponed until Sept. 19. That was prompted by a ruling late on Monday at an emergency hearing with a federal judge in Chicago, who issued a two-week stay of litigation against Caesars to give time to appeal the ruling that had opened the door to the bondholder lawsuits.

A hearing on the appeal is scheduled for Tuesday in Chicago.

Shares of Nevada-based Caesars rose less than 1 percent in Nasdaq trading on Tuesday to $6.37.

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The lawsuits were brought by investors who allege that Caesars reneged on guarantees of bonds issued by its subsidiary, Caesars Entertainment Operating Co Inc, or CEOC

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The operating unit filed for Chapter 11 protection in January 2015 with $18 billion in debt. The bondholders have also alleged that Caesars stripped CEOC of its best hotels and casinos, such as the Linq Hotel & Casino complex in Las Vegas, leaving the subsidiary unable to pay its debts.

Caesars, which is controlled by Apollo Global Management and TPG Capital Management, has denied those allegations.

CEOC has argued its parent should be shielded from litigation because Caesars has committed to contributing billions of dollars to CEOC's reorganization plan.