Caesars Entertainment Corp.’s main operating unit asked a bankruptcy judge to let a court-appointed investigator scrutinize the 2008 buyout that left the casino giant saddled with billions of dollars in unmanageable debt.
The former prosecutor looking into the bankruptcy of Caesars Entertainment Operating Co. should broaden his probe to include the $30 billion leveraged buyout, the unit said in a filing Tuesday in U.S. Bankruptcy Court in Chicago.
Richard J. Davis was appointed to investigate Caesars’ pre-bankruptcy restructuring actions with the goal of determining which, if any, can be successfully challenged by a lawsuit. Because some creditors have also questioned the 2008 buyout, Davis should also look into that transaction, Caesars said.
Any conclusions the examiner reaches on the deal’s legitimacy “will be particularly helpful in assisting the parties in plan negotiations,” the company said.
Caesars’ main operating unit filed for bankruptcy in January with a plan to eliminate debt and reorganize itself. The proposal has split creditors holding billions of dollars in claims. Some have sued, saying the Las Vegas-based company’s pre-bankruptcy actions were illegal and designed to shield the most valuable assets from creditors.
The case is In re Caesars Entertainment Operating Co. Inc., 15-01145, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).