Judge to rule on extended halt to Caesars lawsuits
CHICAGO— A U.S. judge said in Chicago bankruptcy court he will decide Friday whether to extend a halt on lawsuits against Caesars Entertainment Corp. by bondholders who are seeking some $11 billion in claims.
The casino operating unit of Caesars, Caesars Entertainment Operating Co., which filed for bankruptcy with $18 billion of debt in January 2015, has asked for the shield to protect its parent’s multibillion-dollar contribution to its reorganization plan.
Caesars has pledged $4 billion to settle a series of claims of wrongdoing by creditors, many of which have been backed by an independent examiner’s report.
The amount that Caesars contributes to the plan could jump to $4.9 billion, a lawyer for its bankrupt op- erating unit said at a hearing Thursday, improving recoveries for holdout creditors.
The current injunction on lawsuits expires Monday. Unless the court decides to extend it, the reorganization plan would fall apart, lawyer David Zott of Kirkland & Ellis said.
“We’re not doing this to help CEOC. We’re doing this because we need it to fund the plan,” he told the hearing.
About 80 percent of the bankrupt company’s creditors support the reorganization plan, which is set for a confirmation trial in January.
A group of junior creditors has refused to back the plan and argued in court that a shield from lawsuits for the Caesars parent was preventing a fair settlement.