Caesar's Loses Court Case, Stock in Freefall

Court Case

Interesting to watch what happens when a casino corporation rolls the dice and sevens out.

Here's a question: if in fact the parent company is forced into bankruptcy, would they be forced to divest all their casinos, and if so, I wonder who the most likely buyer(s) is / would be?

Some new Howard Hughes type, perhaps?

I'd love to see Bill Gates become a casino mogul.

CET has issues with poor management on all levels, in my opinion. It will be interesting to see how this plays out.

I'm not a finance major, but I'm sure this isn't what Gary wanted to see. From the Article:

"Caesars shares fell 41 percent to $4.76 in New York trading Wednesday, after plunging as much as 59 percent. The stock is down 70 percent this year".

SOLUTION:

If the "fight" is based on the contention that the assets of the overall company were unfairly divided to the shell companies, then just merge all the shell companies back into one big corporation and THEN all the creditors are back in the same boat. If they want to cut their losses, at least everyone would get their "fair" share, right ?

Bankruptcy doesn't mean the corporation disappears, just that the stockholders/bondholders are now different people. Every airline except Southwest has gone bankrupt, yet they are still flying, GM went bankrupt yet it still exists and there are hundreds of other corporations in existence today that went through bankruptcy. If Caesars gets liquidated, then it is a different story, but we are far that point at this time.

I could definitely see some of their properties getting liquidated, but I believe the vast majority of them would have someone out there who thinks they could turn a profit with (outside of AC of course). I doubt the strip properties get split, since they are worth more together than separated, but it would be nice if there was some more competition.

Quote: MrV

Here's a question: if in fact the parent company is forced into bankruptcy, would they be forced to divest all their casinos, and if so, I wonder who the most likely buyer(s) is / would be?

The debt holders will be become the new equity holders and the current stockholders will be wiped out. New ownership might or might not put in new management. Life will go on.

Of course, other thinks can happen during the bankruptcy proceedings. Long shot but someone could say, "I will give you a billion cash for the Flamingo!" Then the court must look at if this is better for the debt holders. But in reality, I expect it not to change much.

Quote: zoobrew

Bankruptcy doesn't mean the corporation disappears, just that the stockholders/bondholders are now different people. Every airline except Southwest has gone bankrupt, yet they are still flying, GM went bankrupt yet it still exists and there are hundreds of other corporations in existence today that went through bankruptcy. If Caesars gets liquidated, then it is a different story, but we are far that point at this time.

But remember, with the auto industry they had to shrink and liquify. They closed hundreds of dealerships and closed tons of plants. They made it through just as CET can but they will have to sell off or close some more of their properties I would think.

Yes underperforming properties could be closed/sold, but the question is how many individual properties are not profitable if they were debt free and didn't have to pay interest or any other onerous long term obligations/contracts.

Quick summary of reported new CZR 'Chapter 11' tactic:

Caesars Entertainment Corp (NASDAQ:CZR) has a new strategy for resolving its contentious bankruptcy

Quote: by ELIAS YATES @Inside Trade

Caesars Entertainment Corp (NASDAQ:CZR) has a new strategy for resolving its contentious bankruptcy: Sue its parent, the parent’s owners and their executives before disgruntled bondholders do... <SNIP>

The original longer & more detailed piece reporting on the above new Ch7 strategy & related issues re CZR creditors:

Caesars Suing Apollo to Stop Creditors From Suing Apollo

Quote: Steven Church @Bloomberg

>Bankrupt casino operator bids to halt bondholder court attack
>Thicket of creditor litigation threatens reorganization plans

Caesars Entertainment Operating Co. has a new strategy for... <SNIP>

"Caesars Entertainment Corp (NASDAQ:CZR) has a new strategy for resolving its contentious bankruptcy: Sue its parent, the parent’s owners and their executives before disgruntled bondholders do." ...from the Article

CLASSIC ! DESPERATE ? You decide.....