Judge approves ex-Watergate lawyer to probe Caesars bankruptcy

Wed Mar 25, 2015 6:11pm EDT
 
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By Tom Polansek

CHICAGO (Reuters) - A lawyer who made his name as a Watergate prosecutor was approved on Wednesday to begin investigating a series of corporate deals in the lead-up to the bankruptcy of the casino operating unit of Caesars Entertainment Corp (CZR.O: Quote).

Richard Davis, a former partner at bankruptcy powerhouse Weil Gotshal & Manges, will investigate whether the operating unit received fair value for choice properties including the Linq complex in Las Vegas. Davis was given a wide-ranging role by the judge who tasked him with investigating potential conflicts of interest by the bankrupt unit.

"You're game for this?" Judge Benjamin Goldgar asked Davis at a hearing in Chicago bankruptcy court, before approving him for the role of examiner. "You're in."

Creditors allege the deals looted billions of dollars from the operator of 38 casinos for the benefit of the parent company, which is not bankrupt, and private equity backers Apollo Global Management (APO.N: Quote) and TPG Capital.

Separately on Wednesday, Goldgar set a June 1 hearing on Caesars' request to suspend existing lawsuits filed against certain Caesars entities.

Goldgar said the question of whether to freeze those cases will depend on whether Caesars can convince him that the lawsuits could distract from the operating unit's bankruptcy restructuring - a "harder argument to make" for a company as big as Caesars, he said.

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Las Vegas Strip casinos are seen from the 550 foot-tall (167.6 m) High Roller observation wheel, the tallest in the world, in Las Vegas, Nevada April 9, 2014.  REUTERS/Las Vegas Sun/Steve Marcus