Casino operator Caesars Entertainment’s messy bankruptcy just got a whole lot messier thanks to an extramarital affair involving a company attorney and a female financial adviser.
This week, Reuters reported that US Bankruptcy Judge Benjamin Goldgar had decided to discard the results of an investigation Caesars had launched in the hopes of proving that its actions prior to the January 2015 bankruptcy filing of its main unit Caesars Entertainment Operating Co (CEOC) were legal.
On March 16, Goldgar revealed that Melissa Knoll, an adviser hired by Caesars in 2014, had “tainted” the results of her investigation by having a tryst with Vincent Lazar, a Caesars attorney. Goldgar said that Knoll’s “sleeping with the enemy” meant there “isn’t any point in pursuing” the results of Knoll’s investigation.
Caesars hired Knoll to investigate allegations by junior creditors that Caesars’ controversial pre-bankruptcy asset transfers and debt reneging activities were intended to shield CEOC’s best assets from any restructuring and thus were illegal.