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Thread: Court Appointed Examiner says Caesars commited FRAUD

  1. #1
    While reading the morning news this story I came upon.. This report if true could be final nail to the Caesars "empire"
    Story from NY Post

    Caesars Entertainment’s court-appointed examiner has told company officials and creditors’ lawyers he believes the company acted improperly when it transferred assets away from the hobbled casino prior to putting it into Chapter 11, The Post has learned.

    A report by the examiner, expected to be released next month, is likely to conclude there was a degree of civil fraud connected to the transfer, three sources with direct knowledge of the talks said.

    The examiner, Richard Davis, held the telephone briefings in recent weeks as he neared the completion of his report.

    Some creditors accused Caesars, controlled by Leon Black’s Apollo Global Management, of moving the gaming company’s best assets beyond their reach without paying adequate compensation.

    The transfers occurred shortly before January 2015 when Apollo put Caesars’ biggest unit into bankruptcy.

    “The examiner said he believes there were deficiencies in the transfer process,” a source close to the situation said.

    If Caesars does not reach a settlement before Davis’s report is issued, its board, including TPG Capital founder David Bonderman and Apollo founder Marc Rowan (both billionaires), as well as NFL star Lynn Swann, could be held personally liable for some claims, sources said.

    Additionally, a finding of fraud could prompt state gaming regulators to investigate Caesars, a third party close to the situation said.

    The transfer of assets came during a hectic period in Caesars’ nearly 80-year history.

    In 2013, with many gaming companies across the country hurting due to increased competition from new brick-and-mortar casinos and from online gaming operations, Apollo, in a bid to salvage its investment in Caesars, split the 49-casino chain into three companies.

    One new part included Caesars’ online assets and its Las Vegas’ Planet Hollywood.

    A second new piece contained Caesars most promising casinos, including the Horseshoe in Baltimore.

    Caesars Entertainment’s court-appointed examiner has told company officials and creditors’ lawyers he believes the company acted improperly when it transferred assets away from the hobbled casino prior to putting it into Chapter 11, The Post has learned.

    A report by the examiner, expected to be released next month, is likely to conclude there was a degree of civil fraud connected to the transfer, three sources with direct knowledge of the talks said.

    The examiner, Richard Davis, held the telephone briefings in recent weeks as he neared the completion of his report.

    Some creditors accused Caesars, controlled by Leon Black’s Apollo Global Management, of moving the gaming company’s best assets beyond their reach without paying adequate compensation.

    The transfers occurred shortly before January 2015 when Apollo put Caesars’ biggest unit into bankruptcy.

    “The examiner said he believes there were deficiencies in the transfer process,” a source close to the situation said.

    If Caesars does not reach a settlement before Davis’s report is issued, its board, including TPG Capital founder David Bonderman and Apollo founder Marc Rowan (both billionaires), as well as NFL star Lynn Swann, could be held personally liable for some claims, sources said.

    Additionally, a finding of fraud could prompt state gaming regulators to investigate Caesars, a third party close to the situation said.

    The transfer of assets came during a hectic period in Caesars’ nearly 80-year history.

    In 2013, with many gaming companies across the country hurting due to increased competition from new brick-and-mortar casinos and from online gaming operations, Apollo, in a bid to salvage its investment in Caesars, split the 49-casino chain into three companies.

    One new part included Caesars’ online assets and its Las Vegas’ Planet Hollywood.

    A second new piece contained Caesars most promising casinos, including the Horseshoe in Baltimore.


    Casinos including Caesars Palace and Bally’s seen from the Atlantic City boardwalk.Photo: ZUMA Press
    The third remaining unit contained 28 of the company’s most troubled brick-and-mortar casinos, including Bally’s and Caesars in Atlantic City. That unit was placed in Chapter 11 reorganization.

    Creditors in the bankrupt unit have $18 billion in claims and some of them believe they received far too little for the assets that were transferred to the two new entities.

    “The examiner has said there are valid claims,” a second source who has direct knowledge of the calls said.

    “The real issue is whether ultimately liability goes beyond the companies to individuals.”

    “That’s absolutely a possibility,” one source said.

    Davis did not tell parties how much the parent company, Caesars Entertainment Corp., owed creditors.

    Caesars has already offered creditors an additional $1.8 billion in cash and stock. Two creditors, David Tepper’s Appaloosa Management and Oaktree Capital Management, feel they are owed billions more.

    Cash-strapped Caesars cannot afford to pay additional billions and needs to get one of them to agree to a settlement, sources said.

    No settlement talks are currently planned, sources said.

    Appaloosa and Oaktree have asked for a nearly 60 percent stake in all of Caesars.

    Caesars, Apollo and TPG declined comment

  2. #2
    I always thought this was really shady.

    CET essentially created a "Good Caesars" and "Bad Caesars", and only declared bankruptcy for the poorly performing assets (the bad Caesars).

    It was arbitrarily split based upon what was likely to generate profit in the future.

    The bankruptcy should apply to their entire empire, not just the portions they think will continue to struggle.
    Check out my poker forum, and weekly internet radio show at http://pokerfraudalert.com

  3. #3
    As soon as the transfers were announced there were allegations that it was both unlawful and being done in preparation for a bankruptcy. This report really won't surprise anyone. It's very likely the rest of the Caesars empire will also be placed into bankruptcy. The only question is really this: will it be a debtor-in-possession or some sort of forced reorganization including a Chapter 7 with assets sold off or distributed to various creditors?

    Personally I think the court will side with a Chapter 11 debtor-in-possession because the basis of the bankruptcy laws is to treat corporations as living beings with a right to life. That means the bottom line is the creditors will lose.

    That doesn't mean Caesars will be unscathed -- there will be big damage done to Caesars and it's operations. But Caesars has a better chance of coming out of this in one piece than the creditors have of getting more money than what Caesars is offering.

    As far as the players go? I think we have seen the worst of it. Bankruptcy is supposed to remove the debt and clear the books and once the claims are wiped away Caesars will be in a better position to compete with other casino companies.

  4. #4
    And there, I think, is the core issue with American capitalism -- corporations have "being" status, which is both recent and irrational. Not only do they have a "right to life" like people, they cannot be imprisoned (unlike people), which provides them a legal status superior to human beings.

  5. #5
    Corporations don't go to jail, but they can be dismantled and seized by the government. Their officers can go to prison. For example, corporations that launder drug money can be seized.

    And the "being status" that you called it goes back to the basics of the bankruptcy laws. It's not recent at all.

  6. #6
    Alan

    This is just one of the reasons why Caesars is going to sell their loyalty program & 7 properties


    Originally Posted by Alan Mendelson View Post
    As soon as the transfers were announced there were allegations that it was both unlawful and being done in preparation for a bankruptcy. This report really won't surprise anyone. It's very likely the rest of the Caesars empire will also be placed into bankruptcy. The only question is really this: will it be a debtor-in-possession or some sort of forced reorganization including a Chapter 7 with assets sold off or distributed to various creditors?

    Personally I think the court will side with a Chapter 11 debtor-in-possession because the basis of the bankruptcy laws is to treat corporations as living beings with a right to life. That means the bottom line is the creditors will lose.

    That doesn't mean Caesars will be unscathed -- there will be big damage done to Caesars and it's operations. But Caesars has a better chance of coming out of this in one piece than the creditors have of getting more money than what Caesars is offering.

    As far as the players go? I think we have seen the worst of it. Bankruptcy is supposed to remove the debt and clear the books and once the claims are wiped away Caesars will be in a better position to compete with other casino companies.

  7. #7
    Corporations as persons goes back to the 14th amendment. Corporations as persons with free speech goes back about five years. Homo sapiens, the animals that are actually persons, has been around for somewhere between 500,000 and 200,000 years. That makes corporations as persons recent.

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