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On Monday, shares of gaming and casino entertainment company Caesars Entertainment Corp. CZR are plunging, down almost 16% in morning trading after a Chicago bankruptcy judge ruled last Friday that the company must face many bondholders’ lawsuits.
The lawsuits are the last big obstacle left in getting Caesars’ parent company, Caesars Entertainment Operating Co. (CEOC), out of bankruptcy. The bondholders are seeking roughly $11 billion in claims, and want to use the lawsuits in order to increase their recoveries above the 34% that Caesars provided.
According to Bloomberg, U.S. Bankruptcy Judge A. Benjamin Goldgar in Chicago denied Caesars request to stop the lawsuits while a U.S. district judge looked over Goldgar’s decision, meaning that CEOC “must now seek an emergency order from a higher court overturning Goldgar’s ruling. Goldgar, who said that will be difficult, concluded that halting the lawsuits with an injunction wouldn’t help Caesars settle with bondholders.”
Last week, Caesars asked its major shareholders, private equity firms TPG Capital and Apollo Global Management APO, for $990 million to help lift it out of bankruptcy. Unfortunately, those requests for funds were rejected.
CEOC originally filed its chapter 11 bankruptcy protection case back in January 2015 with almost $18 billion in debt.
CZR has lost almost 18% over the past 12 months.
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