A examiner that is court-appointed report, ironically published in the Ides of March, found evidence of asset-stripping in Caesars bankruptcy reorganization.
Caesars could face vast amounts of dollars in potential damages with regards to its bankruptcy restructuring, in line with the recommendations of a examiners that are court-ordered report, published Tuesday.
The company is seeking chapter 11 bankruptcy for its chief operating product, CEOC, in an attempt to reorganize $18 billion of its debt, it is facing opposition from its junior creditors.
Ex-Watergate prosecutor Richard Davis led a team of attorneys which invested a 12 months investigating the casino giant’s corporate dealings.
Their aim: to determine whether, as alleged, the business fraudulently transferred many of CEOC’s prime assets to Caesars Entertainment and other subsidiaries for the benefit of its controlling private equity backers, while placing them away from the reach for the junior creditors.
This form of asset-stripping left CEOC with absolutely nothing but distressed assets and an incapacity to cover its debts, argues a small grouping of creditors led by the Appaloosa Management hedge fund, that will be suing Caesars.
CEOC Possibly Insolvent as Early as 2008
The investigation team poured over 80 million pages of documents to produce its 80-page report. But finally it all boiled down seriously to one word.