U.S. judge suggests Apollo, TPG pay into Caesars reorganization
By Tracy Rucinski
CHICAGO (Reuters) - A U.S. judge on Wednesday suggested the casino operating unit of Caesars Entertainment Corp (CEC) ask its parent's private equity sponsors for money to fund a plan to exit its contentious $18 billion bankruptcy.
Apollo Global Management LLC and TPG Capital Management LP formed the Caesars casino holding company in a 2008 buyout and the three groups are facing claims of fraud and asset stripping by creditors of the bankrupt unit.
Caesars, Apollo and TPG have denied the claims.
Caesars Entertainment Operating Co filed for Chapter 11 protection in January 2015 and has a reorganization plan that it says hinges on a $4 billion contribution from its nonbankrupt parent to settle creditors' allegations that it looted the unit of prime casino and hotel assets before its bankruptcy.
On Wednesday, U.S. Bankruptcy Judge Benjamin Goldgar said creditors were being asked to accept considerably less than they are owed in a plan that has not contemplated any money coming from the private equity groups.
"Why should a successful reorganization depend on contribution from CEC alone?" Goldgar asked at a monthly hearing in U.S. Bankruptcy Court in Chicago.
Apollo and TPG declined to comment.
The unit recently asked Goldgar to extend a halt on billions of dollars in lawsuits over debt guarantees from several bondholders against the parent while it makes a last-ditch attempt to settle with holdout creditors. Continued...