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Alternative Market Briefing

Hedge funds Apollo and TPG win Caesars bankruptcy case

Thursday, January 29, 2015

Komfie Manalo, Opalesque Asia:

A U.S. Bankruptcy Judge in Delaware on Wednesday ruled that the bankruptcy of the operating unit of Caesars Entertainment Corp's would proceed in Chicago.

The judge ruling resolved the odd situation of Caesars being in two bankruptcies at once. This was a victory for hedge funds Apollo Global Management and TPG Capital, according to Reuters. But the decision by Judge Kevin Gross dealt a big blow to the casino company’s hedge fund creditors, including Appaloosa Management, Elliott Management and one other hedge fund, which wanted the case in Delaware.

On Jan. 12, the hedge fund creditors sought to force Caesars’ main operating unit into bankruptcy and to appoint an independent examiner to investigate what they allege was the plundering of the company.

The move follows Friday's announcement that the largest U.S. casino operator had the backing of senior note holders for its plan to cut the debt of the operating unit, known as Caesars Entertainment Operating Company (CEOC), to $8.6bn from $18.4bn. Under that plan, the hedge funds that filed the involuntary bankruptcy would be paid around 12% of what they are owed. They hold claims of $41.1m, according to court papers.

Howeve......................

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