Caesars Bankruptcy Not Going Smoothly

"A judge dealt Caesars Entertainment Corp. (CZR)’s bankruptcy reorganization a possible fatal blow in ruling that the company violated federal law when it shuffled assets and refinanced debt as part of an alleged scheme to protect itself from lower-ranking creditors.
The August transactions underpin the proposed bankruptcy reorganization laid out in agreements in which first-lien noteholders would receive a 92 percent recovery while junior noteholders could take home no more than $549 million for their $5.24 billion in second-lien notes."
Ref: Bloomberg, 19 Jan 2015

Basically, last August Caesars split itself into two entities, . . . effectively a "good" Caesars holding valuable corporate assets and a "bad" Caesars loaded with, f'rinstance, unpayable debt.
The result would've "cost" the senior lenders only 8% of their investment, while giving the junior lenders a 99.9% haircut. The judge has suggested this might not be entirely fair.

Being slapped down by the bankruptcy judge was inevitable after they pulled that stunt.

Will we see any criminal & or conspiracy charges against executives?
Should we?

What you say? Are real slime bags not going to be allowed to slither out of debt by deceit?

The Caesar executives are trying to have the case heard in Chicago where it is less likely they will be charged as opposed to Delaware. If Loveman and the hedge funds are able to pull off this stunt, it will amaze me. They've already got a lot further than I thought they would. I thought CZR stock would be headed to zero, but they've managed to keep it above $11 so far.

Stations managed to hold on to most of their properties after bankruptcy but I don't recall them doing anything near as shady as Loveman and his cohorts, although I was in shock Stations pulled off what they did as well.

I think some wise person predicted a few months ago in another thread this was a likely outcome.

As for the likely results I don't think they will face criminal charges for what they have done. While it is a violation of civil law it is a lot harder to prove that there was some sort of (individual) criminal wrong doing. In fact any crime that would have been committed would have been the responsibility of the corporation not the individual.

The more interesting development is that the assets of the two companies will now likely be combined for bankruptcy purposes. What that means in a practical sense is when the court takes reorganization plans into consideration other companies will be able to bid on parts of the empire. For example if someone came forward and wanted to bid on just Caesars Palace they could do that. However, for any breakup of the empire to occur the overall reorganization plan would have to result in a greater return to creditors than existing Caesar's management's reorganization plan.

So hypothetically here is how it could work: Several competing companies could come in and bid on the specific properties they want. If the collective value of those bids would yield a greater return to the creditors the empire would be broken up into bits and pieces.

No. It's simply legal gymnastics that would never work.

NVM

Break them up. I would love to see good old fashioned competition come back, including 3 to 2 blackjack, better pay tables and better comps.