That Caesars Entertainment plan to subdivide itself into a REIT may be a one-week wonder: Creditors are reported to be balking at the structure. “The creditors want to make sure the REIT is structured in a way that protects them as the unit’s new 
owners, the people said,” to the Wall Street Journal. They may be concerned that being under the operating-company half of the REIT, which would leave them at the mercy of Gary Loveman, David Bonderman and Leon Black, the Three Horsemen of the Apocalypse. “Some senior creditors are concerned that Caesars would have outsize leverage in managing the properties within the REIT in a way that could affect its profitability, according to people familiar with the talks,” reports the WSJ.
Creditors are asking for guarantees of lease income, which could easily become a sticking point. The longer the disagreement drags out, the closer Caesars gets to a mid-January interest payment upon which it would like to default. The real losers in this are the junior bondholders, who left holding nothing unless they agree to Loveman’s plan … in which case they get next to nothing.
In the meantime, a fraudulent-conveyance lawsuit against Caesars inches closer to being heard in a Delaware court. Caesars has counterfiled to have the case heard in 
New York, with attorney Eric Seiler saying, “I don’t think the court should do anything to interfere with the New York court’s ability to decide what it wants to do.” At issue are asset transfers from Caesars Entertainment Operating Co. to Caesars Acquisition Properties, thereby sheltering those goodies from a CEOC collapse.
Or, as plaintiff Wilmington Savings Fund Society put it, Loveman split the company into a “good Caesars” and a “bad Caesars,” in case Chapter 11 was in order. In another suit, Elliott Management wants CEOC placed in receivership. That’s probably a good idea, especially since the REIT scheme leaves Loveman at the steering wheel, even though his tenure at Caesars has been calamitous.
Caesars’ count-argument is that indentures permitted the jiggery-pokery with the assets and, anyway, and the credit-default swaps held by some of the creditors will pay handsomely should Caesars collapse.
In the meantime, Caesars remains on the verge of embarking upon a $1 billion casino in South Korea for Chinese tourists.
* Trump Taj Mahal is out of the ICU unit, according to Atlantic City Mayor Don Guardian. He says a new fixed-payment scheme will give the property the financial 
stability it needs. The 15-year plan calls for $150 million from the city’s casinos for two years and $120 million for each of the remaining 13. Casino Reinvestment Development Authority monies would be redirected toward retiring Atlantic City’s debt. The Atlantic City Alliance would be cannibalized, more money would go toward local schools, and a proposal to freeze taxes on non-casino property is on the table. (I suspect a similar proposal phasing out city pensions for an undetermined number of years will not be so warmly received.) The bill is still being tweaked but looks like it will make it out of the New Jersey Legislature with dispatch.
* The autopsy for Ultimate Gaming is in and the cause of death was social gaming (Ultimate didn’t have any). You might say the wound was self-inflicted because Station Casinos allied itself with the popular MyVegas application. You can’t play poker on it but you can earn an armful of Station freebies.
Has there been any blowback towards Loveman? His efforts have been a steaming pile for years, so I guess anybody losing money on this mess has it coming. It’s too bad we’re not in Japan, where he would have had to off himself as a response to his incompetence.