Casino operator Caesars Entertainment’s interminable bankruptcy proceedings got even more complicated after word broke that the court-appointed mediator had abruptly resigned.
Back in March, retired judge Joseph Farnan was enlisted to mediate negotiations between creditors and Caesars’ bankrupt main unit, Caesars Entertainment Operating Co (CEOC). On Friday, Farnan submitted his letter of resignation, saying “recent events have convinced me that I am unable to continue the mediation process.”
Caesars has been trying to win approval of its restructuring plan ever since CEOC filed for Chapter 11 bankruptcy protection in January 2015. Junior creditors have balked at Caesars’ lowball offers, and have filed lawsuits in New York and Delaware challenging the pre-bankruptcy asset transfers that stripped CEOC of much of its value and for Caesars having reneged on pledges to honor CEOC’s debts.
Two weeks ago, US Bankruptcy Judge Benjamin Goldgar ruled that those lawsuits could proceed based on the apparent lack of progress in the restructuring negotiations. A different federal judge has stayed those lawsuits until October 5 to allow Caesars to appeal Goldgar’s ruling.