Harold Brubaker, Inquirer Staff Writer Posted: Friday, November 28, 2014, 5:00 PM The $134 million corporate meeting center rising at Harrah’s Resort Atlantic City is supposed to represent the city’s less casino-centric future. But a lawsuit filed this week gave it a role in the high-stakes battle between Caesars Entertainment Corp. creditors owed about $25 billion and the Las Vegas firm’s private-equity backers over who will get paid from Caesars’ insufficient resources. The lawsuit, filed in Delaware Court of Chancery Tuesday by a bank representing senior lenders owed $1.25 billion, called efforts to deal with Caesars debt load “a case of unimaginably brazen corporate looting and abuse.” The conflict centers on the strategy of private-equity firms Apollo Global Management L.L.C. and TPG Global L.L.C., which bought Caesars in a $30 billion leveraged buyout in 2008, to save what they can of their investment by carving Caesars in to slices with different prospects. More analysis Three Atlantic City casinos – Caesars, Bally’s, and the now-shuttered Showboat – landed in the dumping ground of properties with uncertain futures called Caesars Entertainment Operating Co. Inc. This company, which moreover owns Harrah’s Philadelphia in Chester, asserted in its third-quarter report in that it expected to run out of cash next year if it doesn’t financially restructure or reorganize through Chapter 11 bankruptcy. Harrah’s Resort Atlantic City, by contrast, was put in to Caesars Entertainment Resort Properties L.L.C., which moreover includes five Nevada casinos and has a better chance of surviving and making acceptable on its debts, reportedly analysts. That split divided Caesars properties in to haves and have-nots, as is evident in the levels of capital expenditures by Caesars in Atlantic City. The cash being invested in the new conference center is 30 % more than the combined capital expenditures at Caesars’ three other Atlantic City properties over the last five years, according the lawsuit. The conference center’s parent, Caesars Entertainment Resort Properties, is expected to be profitable enough to make its interest payments this year and next year, a recent New Jersey Division of Gaming Enforcement report said. That’s not the case for Caesars Entertainment Operating Co., which owns Caesars’ three other Atlantic City casinos. It is expected to have an $862 million shortfall this year between its operating income and required interest payments and a $743 million shortfall next year, the filing said. The difference will be paid from the proceeds of asset sales. …
Read the rest…Creditors, hedge funds intertwine over Caesars’ resources
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