David McKee

Reorganization of Caesars Entertainment promises to continue to provide drama. UMB Bank threw red meat on the barbeque with a lawsuit that charged Apollo Management and Texas Pacific Group with having “thoroughly ransacked CEOC in a sweeping and now transparent plan to take CEOC’s prime assets for themselves and leave its liabilities and creditors behind … This is a case of unimaginably brazen corporate looting and abuse perpetrated by irreparably conflicted management.” Top management is accused of having “stripped CEOC of eight of its most valuable hotel, casino and entertainment properties — including a six-property stronghold in the heart of the Las Vegas Strip — on terms that were patently unreasonable in order to enrich themselves at the expense of CEOC’s creditors … for staggeringly inadequate consideration.”

Given how the spinoff of Caesars Growth Properties from Caesars Entertainment Operating Co. (Little Caesar and Big Caesar) was conducted, there’s a lot to what UMB says. Several of the prize assets are now sequestered safely in Little Caesar, whether we’re talking about the World Series of Poker or Total Rewards. However, with most senior bondholders and term-loan creditors lining up behind Caesars’ REIT-structured reorganization plan, can UMB hope realistically to Continue reading →