Caesars unit's bank lenders threaten to end bankruptcy deal

Tue Dec 6, 2016 2:02pm EST
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By Tracy Rucinski

CHICAGO (Reuters) - The bank lenders of Caesars Entertainment Corp's (CZR.O: Quote) operating unit said they might walk away from a plan to bring the casino unit out of its $18 billion bankruptcy, potentially sending a high-stakes reorganization plan into disarray.

The committee of bank lenders, which includes Blackstone Group LP's (BX.N: Quote) GSO Capital Partners, has yet to resolve a dispute over the terms of their recovery, their lawyer Kristopher Hansen said at a hearing in U.S. Bankruptcy Court in Chicago on Tuesday.

Hansen said the lenders would inform the court on the status of a deal by Dec. 14, a month before a scheduled confirmation trial in Caesars Entertainment Operating Co Inc's long-running bankruptcy case.

Without a deal, Hansen said the committee would terminate a restructuring support agreement, forcing the confirmation trial to be postponed from Jan. 17.

Bank lenders, which had been among the first to back the unit's reorganization plan, say their support depends on documentation that ensures the market value of the non-cash consideration they are set to receive under the plan.

Without the documentation, committee members said they would change their votes on the plan.

"Simply put, without the consent of the bank lenders, the plan completely unravels," they said in a Nov. 21 court filing.

Caesars did not immediately comment.   Continued...

An evening view of the 550-foot-tall High Roller observation wheel after opening in Las Vegas, Nevada March 31, 2014. The observation wheel, the tallest in the world, is part of the Linq project, a $550 million development by Caesars Entertainment Corp. REUTERS/Las Vegas Sun/Steve Marcus