Caesars has been told in a US court that its $18 billion (€16.6 billion) bankruptcy case could be dismissed if it does not reveal the results of an inquiry into whether it transferred its most profitable properties to new owners before filing to reorganise under Chapter 11.
The gaming operator was told by US Bankruptcy Judge Benjamin Goldgar on Wednesday that if the report remains sealed he may dismiss the bankruptcy case, or convert it from Chapter 11 reorganisation to a Chapter 7 liquidation.
Goldgar last year ordered an independent investigation into creditor accusations that Caesars Entertainment Corp had stripped its casino operating unit of its best assets – creating a “good Caesars” and “bad Caesars” – but the court heard this week that the operator had asked for the examiner Richard Davis’ report to remain private.
Goldgar agreed to allow a redacted version of the report, which could be ready by the end of February, to be filed temporarily alongside a public summary, but told the examiner to reconsider a procedure to release the full report.
The examiner's report is considered a major hurdle for Caesars to gain the support of bondholders for its restructuring plan, which envisions splitting the bankrupt unit into a casino operator and a property company.
On Thursday, the New York Post quoted sources saying that Davis’ report will side with junior creditors by declaring that there were “deficiencies” and “a degree of civil fraud” in Caesars’ pre-bankruptcy activities.
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