Bloomberg - CZR Down 16 % Today - "...could... force it into bankruptcy as well".

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Excerpt:

U.S. District Judge Shira Scheindlin in Manhattan said on May 28 that the trustee representing some of the operating company’s creditors can ask her to rule on parts of its suit without first holding a trial. If she rules in favor of the trustee’s claims, that could eventually expose the parent company to billions of dollars in liabilities and force it into bankruptcy as well.

So, what does this mean for "Joe Low Roller" like myself ? What will it eventually mean ? How did the creditors get into this mess in the first place ?

Disclaimer: I may or may not own any CZR stock. I hope not. I don't pick individual stocks for my 401K investments, they are in various index funds that have management fees on the lower side of things.

Quote: JohnnyQ

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So, what does this mean for "Joe Low Roller" like myself ? What will it eventually mean ? How did the creditors get into this mess in the first place ?

Disclaimer: I may or may not own any CZR stock. I hope not. I don't pick individual stocks for my 401K investments, they are in various index funds that have management fees on the lower side of things.

How did the creditors get into this mess in the first place ? Private equity heavyweights convinced Wall Street that a cash flow rich company like CZR would be a good company to take private and use the cash flow to pay themselves big dividends. So they loaded CZR with $20B in debt and took it private in 2008!!!! The great recession hits and instead of dividends they got a worst timing award.

Not to mention the completely nuts, and possibly fraudulent, ventures of the Apollo Group as outlined in detail last month in the Review Journal and The New York Times.

Someone tried to convince me to buy some shares of CZR stock but that's beyond my understanding capacity.

"Shares, that's what me pappy cuts me hare with"

I think it means that you should be very careful and not try to make a strong "tier push" until things unfold. Of course Caesars is going to tell us everything is business as usual but if they are forced into a sale of some of their properties (that we frequent and receive offers at) they have absolutely no say in whether our offers and comps will be honored with the new management company.

I have been receiving very strong offers from Harrahs Lake Tahoe and other properties that are on the chopping block for the past 6 months. I have been very vigilant in keeping up with the court proceedings as it can and will directly effect "us". Right now I am 2/3 of the way to renewing my Seven Star Tier but I am not in a big hurry to get there.

Next time you are at your favorite CET casino look around and realize that nobody is going to be in a state of panic because even in the event of a buy out most of the dealers and personnel will be offered a job within the new company. It is much more cost effective to retain the trained and experienced staff than hire and train new employees. But din't be fooled into a false sense of security. The only people who will be effected ultimately are US.

But your local casino could be sold and still have CET as the casino operator. This happened this year in Ohio where CET sold their 20% stakes in the casinos to majority owner Rock Ohio Ventures LLC, but still manage the casinos. CET/Total Rewards could become like a Best Western type of business, where they don't own the properties but the group marketing power is valuable.

Quote: zoobrew

But your local casino could be sold and still have CET as the casino operator. This happened this year in Ohio where CET sold their 20% stakes in the casinos to majority owner Rock Ohio Ventures LLC, but still manage the casinos. CET/Total Rewards could become like a Best Western type of business, where they don't own the properties but the group marketing power is valuable.

Your absolutely correct in what you say; but the bottom line is if the new investors want to "tighten the belt" and become profitable CET management will have to go by their guidelines.

A perfect example is the now Hollywood Casino in St Louis, formerly Harrahs. Before the sale they were very generous with comps, Cards and Rams game tickets etc. When Hollywood took over they retained most of the staff (my host stayed the same) and they promised a seamless transition. But soon enough I noticed their player ratings lowered and the comps dwindled. Needless to say I haven't been there in 2 years.

I hope your right and IF a sale is forced on one of our favorite properties things stay the same!!!!

I don't know of a single Hollywood casino with a decent comp or cash back rate. Toledo especially. In fact, there is no cash back for slot or VP play there.

Quote: Ibeatyouraces

I don't know if a single Hollywood casino with a decent comp or cash back rate. Toledo especially. In fact, there is no cash back for slot or VP play there.

That's my concern because as much as Caesars has messed things up for themselves they do have the best comps and easiest to achieve tier system. I'm 2/3 of the way to Seven Star and I've barely tried this year!! They also are the only casino chain that pays for my airfare upfront no matter where I go. Can't beat it.

The last time I was at Hollywood St Louis I played craps; somewhere in the neighborhood of 200-260 per bet for 6-7 hours. I was appalled to see that they only gave me 1k tier points for my play and I was very vigilant about checking in with the pit boss to see where my average was. That type of play at Harrahs will give me at least 2500 tier (plus 2500 tier bonus) so essentially I would have earned 5k for the same play with CET.

wait. thought caesars was already in bankruptcy?

what am I missing?

Quote: 100xOdds

wait. thought caesars was already in bankruptcy?

what am I missing?

Parts of Caesars are in bankruptcy. CZR has a complicated structure so various operating units and their corresponding debt are in bankruptcy, while other parts are not. The major issues are whether valuable assets were illegally transferred from different units without the attached debt, so that the creditors were left with an empty shell. This case will be in the courts for awhile before all is settled.

Quote: 100xOdds

wait. thought caesars was already in bankruptcy?

what am I missing?

Here's the latest:


New York District Judge Shira Scheindlin last week indicated she would like to rule on a $750 million lawsuit alleging that Caesars’ parent illegally removed a loan repayment guarantee it held against the now-bankrupt unit before the present bankruptcy case concludes. If the Chicago judge does not give Caesars a stay, an adverse New York ruling could ultimately force all of Caesars into bankruptcy, sources said. “There is a 50/50 chance the [Chicago] judge gives them a stay,” a source close to the Caesars case said. The New York judge will likely rule against Caesars, multiple sources said.


Basically this could force Caesars into liquidating before they even get a chance to present a repayment/restructuring plan....and we (the players) are possibly screwed!!

Here's a good article about the whole debacle:

http://fortune.com/2015/06/05/caesars-losing-las-vegas/

Quote: teddys

Here's a good article about the whole debacle:
http://fortune.com/2015/06/05/caesars-losing-las-vegas/

Topnotch piece. Didn't leave out much, either. Thanks.

Quote: teddys

Here's a good article about the whole debacle:

http://fortune.com/2015/06/05/caesars-losing-las-vegas/

What I see as the heart of the lawsuit by the junior creditors of CEOC, Inc:
- Caesar's is a shell company and it biggest subsidiary (CEOC) sold off/xferred 10 casinos to a new subsidiary (CGP).
GCP gave CEOC $3.8B for those 10 casinos.

- then CEOC declared bankruptcy after burning through the $3.8B, leaving the junior creditors getting 20¢ on the dollar.
The senior creditors got paid 100%.

I'm assuming those 10 casinos that were xferred are the better, higher profit ones? so the junior creditors were left with the bad casinos?

so the question is whether $3.8B for 10 casinos was fair market price at the time of the sales??
or did I miss something?

“I want to go do something else,” says Loveman. “I won’t work in the casino business again." As if anyone would hire him. Or if anyone would lend him a penny.

The courts will most likely end up deciding what the junior creditors (mainly a few strong hedge funds) end up with, just as they did in the General Motors bankruptcy.

Quote: teddys

Here's a good article about the whole debacle:

http://fortune.com/2015/06/05/caesars-losing-las-vegas/

Thanks. Talk about complicated..... Loved the original title of the article:

"A version of this article appears in the June 15, 2015 issue of Fortune magazine with the headline ‘Losing Las Vegas.’ "

Quote: Ibeatyouraces

I don't know of a single Hollywood casino with a decent comp or cash back rate. Toledo especially. In fact, there is no cash back for slot or VP play there.

I agree with this 100%. The Hollywood brand is owned by Penn national gaming correct? I've never played at one of their properties that had anything resembling a decent comp rate. I once played the Charlestown WV property for 4 hours at $25-$75 a hand at BJ. Asked for a $20 food comp, at the time I was right around even...maybe up a hundy or two. I was gonna get an early sandwich and come back and play some more. When the pit critter denied my comp...she said something along the lines of "we don't comp people who are winning". I said. OK. Colored up and left. I hate that sort of short sighted management. When will they learn.

Also since this is a CET thread. I continue to be surprised at the financial shenanigans you can get away with if Billions are involved. Any small business person who tried the BS CET is trying would go to jail.