Before Caesars Entertainment could file for bankruptcy, second-tier bondholders struck first. They have filed with a U.S. bankruptcy court in Delaware, seeking to supersede 
Caesars’ prepackaged bankruptcy. At issue are the controversial transfer of highly valuable Caesars assets into subsidiary Caesars Acquisition Co., shielding them from Chapter 11. “Insiders paid themselves hundreds of millions of dollars while moving assets out of the reach of second-lien debt holders, according to the filing,” asserts the filing, as summarized by Bloomberg News.
The document itself makes the following j’accuse: “These insider transactions stripped the debtor of most of its valuable income-generating assets and hundreds of millions of dollars of cash, leaving the debtor burdened with massive debt that cannot be repaid.” Caesars dismissed the filing as a “ploy” and vowed to continue normal operations. By choosing a Delaware court, in a state where Caesars lacks a presence, Appaloosa Investment and its co-plaintiffs are seeking an advantage in venue over a state where Caesars’ ubiquity might gain it a sympathetic ear from the bench. It is also probably a move to stave off Caesars and co-owners Texas Pacific Group and Apollo Management from retaining any equity in the company.
Judging from the litigation it’s engendered, Gary Loveman‘s strategy of cleaving his company into a big “bad Caesars” and a smaller “good Caesars” may have been more trouble than it’s worth.
* As was the case across the Upper Midwest, Missouri ended 2014 with an upswing. Admissions were 2% higher last year and player spending rose 2%, too. Isle of Capri Casinos had a particularly good month, its four properties up 12.5%, led by Lady Luck 
Carustherville (+18%, $3 million), and Caesars didn’t do too badly at Harrah’s North Kansas City, where revenues rose 10%. In the St. Louis market, Penn National Gaming slipped a bit at Hollywood Casino St. Louis (-2%) while neighbor Ameristar St. Charles (left) was up 10%, leading the market with $22.5 million. Tropicana Entertainment is having trouble getting Lumiere Place turned around, with an eye-catching 15.5% falloff. By contrast, Pinnacle Entertainment‘s River City enjoyed an 8% bump, grossing 18%.
Pinnacle’s Ameristar Kansas City fared less well, declining 1% (despite grossing a market-leading $16 million), as Penn’s Argosy Riverside made a 6.5% gain. Rounding out the market, Isle of Capri Kansas City leapt 16% on $6 million.
* There’s a sudden rush to get into Massachusetts‘ southeastern casino region. However, all the applicants to date are small fry. And there’s no sign of former aspirant Foxwoods Resorts Casino, which is having serious financial problems on the home front.
