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Caesars Faces Billions in Claims, Investigation Finds Evidence of Private Equity Asset-Stripping

A examiner that is court-appointed report, ironically published in the Ides of March, discovered evidence of asset-stripping in Caesars bankruptcy reorganization.

Caesars could face billions of dollars in potential damages in relation to its bankruptcy restructuring, according to the suggestions of the examiners that are court-ordered report, published Tuesday.

The company is seeking chapter 11 bankruptcy because of its chief operating product, CEOC, in an attempt to reorganize $18 billion of its debt, it is facing opposition from its junior creditors.

Ex-Watergate prosecutor Richard Davis led a team of solicitors which invested a year investigating the casino giant’s corporate dealings.

Their aim: to determine whether, as alleged, the company fraudulently transferred many of CEOC’s prime assets to Caesars Entertainment as well as other subsidiaries for the main benefit of its controlling private equity backers, while placing them out of the reach associated with the junior creditors.

This form of asset-stripping left CEOC with nothing but assets that are distressed a failure to pay for its debts, argues a small grouping of creditors led by the Appaloosa Management hedge fund, which is suing Caesars.

CEOC Possibly Insolvent as Early as 2008

The investigation team poured over 80 million pages of documents to create its 80-page report. But eventually it all boiled down seriously

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