Caesars May Face Multiple Probes of Pre-Bankruptcy ActionsSteven Church
Caesars Entertainment Operating Co. may face multiple probes of its pre-bankruptcy restructuring efforts, a judge said in a ruling that might unleash a “free-for-all” of investigations.
U.S. Bankruptcy Judge Benjamin Goldgar said Wednesday that he planned to deny a request by a court-appointed examiner to temporarily limit creditor investigations of the Las Vegas-based casino company. The examiner argued that multiple, unfettered investigations could delay his official report, which will evaluate the propriety of Caesars’ decision to transfer assets and refinance some debt in the years before filing for bankruptcy.
“Let’s assume a free-for-all,” Goldgar said in Chicago bankruptcy court while agreeing to delay a final order so the examiner and creditors might work out details about how the groups would interview company officials.
Two creditor committees and examiner Richard J. Davis are preparing to investigate asset transfers that creditors say stripped Caesars of valuable property that might have been used to pay them and refinance debt in a way that reduced repayment guarantees.
Davis argued that his probe is designed to gather facts and not to prepare a lawsuit. He sought to prevent creditors from attending interviews he intends to conduct with company officials and to stop creditors from interviewing them under oath until his report was finished.
Goldgar said Davis could exclude creditors from his interviews and that he was inclined to deny Davis’s request to limit creditors’ ability to interview company officials under oath on their own. The examiner and creditors said they will try to work out a compromise.
Also on Wednesday, Goldgar said he’d wait until next month to rule on a bid by Caesars for more time to file a reorganization plan. He said he was ready to decide on the request but opted to give creditors a chance to argue against more time.
Creditors want to file their own plan but must wait until after Caesars’ exclusive time to reorganize itself runs out.
The case is In re Caesars Entertainment Operating Co. Inc., 15-01145, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).