Caesars mediator resigns in casino unit's bankruptcy

Fri Sep 9, 2016 5:01pm EDT
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By Tracy Rucinski

CHICAGO (Reuters) - The mediator trying to resolve the $18 billion bankruptcy of Caesars Entertainment Operating Co Inc (CEOC) abruptly stepped down on Friday, according to a court filing, adding another twist to the complex case.

CEOC filed for bankruptcy in January 2015 amid creditor accusations that its parent Caesars Entertainment Corp (CZR.O: Quote) and private equity sponsors Apollo Global Management LLC (APO.N: Quote) and TPG Capital [TPG.UL] had stripped it of its best assets.

Retired U.S. Judge Joseph Farnan was tasked in March to help the feuding parties reach a settlement and lift CEOC out of bankruptcy.

"I'm convinced that I can't continue and possibly a new mediator will be able to establish a workable process," Farnan said in a letter published in a filing with the U.S. Bankruptcy court in Chicago.

It was not immediately clear who, if anyone, would take over his role.

Farnan said his resignation was not the fault of those involved with the case. Instead, he blamed the "atypical views" of mediation by U.S. Bankruptcy Judge Benjamin Goldgar, who is overseeing the case in Chicago.

In a ruling last month to lift a shield from lawsuits against the Caesars parent, Goldgar cast doubt over the effectiveness of mediation, despite a filing from Farnan citing progress. CEOC has appealed the ruling.

Goldgar had suggested that Farnan should testify in court to the progress of the mediation.   Continued...

The marquee sign at Caesars Palace hotel is seen on the strip in Las Vegas, Nevada, U.S. February 16, 2011.  REUTERS/Steve Marcus/File Photo