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A Bitter Fight for Caesars Assets

Wall Street titans go to war over the assets of Caesars’ troubled casino empire
From left, Elliott Management’s Singer and Apollo Global Management’s Black
From left, Elliott Management’s Singer and Apollo Global Management’s BlackPhotographer, from left: Jacob Kepler/Bloomberg, Jonathan Alcorn/Bloomberg

Leon Black and Paul Singer got rich by outsmarting other people. For much of this year they’ve been trying to outsmart each other. Black’s Apollo Global Management and Singer’s Elliott Management battled over the fate of casino operator Caesars Entertainment, the company Apollo and TPG Capital acquired in a 2008 leveraged buyout. Caesars is burdened by lackluster properties and $25.5 billion of debt—some owned by Elliott—that came with the deal. Apollo wanted to preserve its ownership stake in Caesars, while Elliott was loath to accept less than it’s owed on its loans to Caesars. The showdown was “Godzilla vs. Godzilla,” says Erik Gordon, a professor at the Ross School of Business at the University of Michigan in Ann Arbor.

On Dec. 19, Apollo signed a tentative pact with Elliott and other creditors. The parties had to overcome clashing agendas and an acrimonious history. So great was the ill will between Apollo and Elliott that when Apollo held a pivotal negotiating session at its office in Manhattan, it didn’t invite Elliott, people with knowledge of the matter say. Caught in the middle were scores of companies holding Caesars debt, including KKR, Oaktree Capital Management, and Pacific Investment Management Co.—plus about 68,000 Caesars employees wondering if they’d have jobs. Fran McGill, an Apollo spokesman, called the deal “a significant step in Caesars’ ongoing efforts to create a sustainable capital structure” and “ensure the best outcome for all stakeholders.” An Elliott spokesman declined to comment.