Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Caesars Bankruptcy Plan Dented By Federal Judge
Author: Joel R. Glucksman
Date: February 2, 2015
Key Contacts
Back
A federal judge may have just dealt a fatal blow to Caesars Bankruptcy Plan.
Caesars bankruptcy was filed on January 15, 2015. However, in August, Caesars’ allegedly transferred a number of its assets to related business entities out of reach of creditors, according to Bloomberg. The company then canceled certain of its guarantees, so that holders of second-lien notes issued in 2005 and 2006 were cut out. These noteholders then filed an involuntary bankruptcy against Caesars Entertainment Operating Co., the largest of the Caesars operating companies.The noteholders alleged that Caesars was barred from altering its obligations to pay its bonds without full consent from the holders under Section 316 of the Trust Indenture Act.
District Judge Shira Scheindlin described the complaint as an allegation that Caesars’ plan was to put the main unit of Caesars bankruptcy while protecting TPG Inc. and Apollo Management LP from its creditors, the news source reported.
The ultimate result would be that first-lien noteholders would receive 92 percent of their stake, while second-lien noteholders would recover just $549 million of their $5.24 billion stake.
Scheindlin ruled that the deal was illegal, noting that it amounted to “impermissible out-of-court debt restructuring” that left bondholders “with an empty right to assert a payment default from an insolvent issuer,” according to ValueWalk. Caesars’ spokesperson Stephen Cohen expressed the company’s disapproval of the ruling.
“We respectfully disagree with the court’s ruling, which was based simply on the plaintiffs’ allegations and that we believe is inconsistent with the provisions [of federal law],” said Cohen. “And given the size of the claims at issue and our strong defenses, we do not expect the ruling to impact the planned reorganization.”
While the ruling was only preliminary, it is expected to strengthen the claims of second-lien bondholders alleging harm from Caesars’ asset switch.bt
Any thoughts on the federal judge’s blow to Caesars Bankruptcy plan? Feel free to leave a comment in the section below.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Scarinci Hollenbeck Expands NYC Real Estate and Litigation Practices ADDING four litigators
NYC Real Estate and Litigation Attorney Ryan O. Miller and Team Join Scarinci Hollenbeck, LLC New York City, NY – August 13, 2025 – Scarinci Hollenbeck, LLC has strengthened its Real Estate and Litigation practices with the addition of four New York City-based attorneys. Ryan Miller, who joins as a partner, is well known for […]
Author: Scarinci Hollenbeck, LLC
What is Business Law and Why Is it Important?
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Author: Dan Brecher
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
How to Conduct a Fair and Legal Employee Termination in 2025
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
Admin Dissolution for Annual Report: What You Need to Know
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
What Is Antitrust Litigation Law?
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.