Caesars directors must 'pony up' details of wealth: judge
- Wall Street turns defensive on Trump's protectionist stance
- Aetna's (AET) Humana (HUM) Takeover Blocked by Judge as Anticompetative
- Trump signs order withdrawing U.S. from Trans-Pacific trade deal
- Qualcomm (QCOM) Thrashed as Apple (AAPL) Lawsuit Threatens Licensing Business Model
- McDonald's (MCD) Tops Q4 EPS by 3c
David Bonderman during the 2014 Milken Institute Global Conference in Beverly Hills, California April 29, 2014. REUTERS/Kevork Djansezian
News and research before you hear about it on CNBC and others. Claim your 2-week free trial to StreetInsider Premium here.
By Tracy Rucinski
CHICAGO (Reuters) - Billionaire investors Marc Rowan and David Bonderman are among Caesars Entertainment Corp (NASDAQ: CZR) directors who must disclose details of their wealth to creditors of the casino holding company's bankrupt subsidiary, a U.S. judge said on Wednesday.
Junior creditors of Caesars Entertainment Operating Co Inc (CEOC) convinced the court on Wednesday to force six of the parent's directors to prove they can contribute to CEOC's reorganization plan in exchange for releases from allegations of fraud.
"These folks are going to have to pony up the paper," U.S. Bankruptcy Judge Benjamin Goldgar said at a hearing in Chicago on Wednesday.
CEOC filed an $18 billion bankruptcy in January 2015.
Junior creditors accuse directors of Caesars and its private equity sponsors Apollo Global Management LLC (NYSE: APO) and TPG Capital [TPG.UL] of orchestrating a plan to strip CEOC of "crown jewels" such as the Linq Hotel & Casino complex in Las Vegas prior to its bankruptcy.
While Caesars, Apollo and TPG have denied the allegations, a court-appointed independent examiner found in March that the three could be on the hook for up to $5 billion.
Caesars has pledged $4 billion to a CEOC reorganization plan that junior creditors refuse to support, arguing in part that individual directors should contribute if they want releases from claims.
In a motion filed on Aug. 31, the creditors demanded financial information from Caesars' directors Rowan and David Sambur of Apollo and Bonderman and Kelvin Davis of TPG, as well as former Caesars' executives Eric Hession and Gary Loveman, who remains on the board.
Rowan and Sambur complained in a court filing last week that the creditors were demanding "a staggering array" of evidence of their personal financial affairs, including the "receipts and instruction manuals for their children's toys."
Goldgar agreed on Wednesday that the requests should be whittled down to something more "reasonable" before saying he would approve a revised list of creditor demands.
Rowan and Sambur have already offered to contribute $250 million to the CEOC reorganization plan, which would give creditors stock in a new group to be created through a merger between Caesars and another affiliate, Caesars Acquisition Co (NASDAQ: CACQ).
That merger "reassembles all of the relevant assets back into a consolidated enterprise in a manner that would significantly alleviate the alleged harm" at the heart of junior creditors' allegations, Caesars said in a court filing this week.
(Editing by Tom Hals and Matthew Lewis)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Silgan (SLGN) to Acquire WestRock's (WRK) Specialty Closures and Dispensing Systems Business for $1.03B
- Avis Budget Group (CAR) Adopts Short-Term Stockholder Rights Plan
- TerraForm Power (TERP) Enters Exclusivity Agreement with Brookfield Asset Management Regarding Possible Deal
Create E-mail Alert Related CategoriesReuters
Related EntitiesBankruptcy, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!