Creditors suing Caesars Entertainment want to force one of the casino operator’s attorneys to explain how the company came to renege on a $7b loan guarantee.
Creditors suing Caesars in Delaware have asked the court to compel attorney Gregory Ezring to testify as to how Caesars Entertainment Corporation (CEC) arrived at its 2014 decision to sell a small piece of its main unit Caesars Entertainment Operating Co (CEOC), which filed for bankruptcy in January.
According to documents obtained by Bloomberg News, junior creditors are looking for info on an April 2014 presentation made to CEC’s board by an attorney who worked with Ezring, whose firm represents Apollo Global Management, one of CEC’s hedge fund owners.
One month after that presentation, CEC sold 5% of its stake in CEOC, a move CEC claims removed the parent company’s responsibility to honor the $7b debt guarantee to junior creditors. These creditors have sued CEC and top Apollo execs in Delaware and New York over the debt reneging and the controversial transfer of profitable assets out of CEOC prior to the bankruptcy filing.