Caesars to file for Bankruptcy

[TheXFactor]

Caesars Said Lining Up Creditors for January Bankruptcy
http://www.bloomberg.com/news/2014-1...ankruptcy.html

They are transfering assets into another company and preparing to file Bankruptcy in January.

Hopefully, they will be forced to sell the World Series of Poker.

I guess being $24 Billion in debt is not sustainable.

[DannyDeadWood]

I'm not sure how Gary Loveman has kept his CEO job. He was a professor at Harvard before he took the head job at Harrah's and was at the helm when the Caesar's buy out occurred. Very few CEO's have been given this much rope. The company has been in the financial toilet for years mostly for all the debt he bought with Ceasar's. How does the board of directors not make a change?

[Dan Druff]

Not only that, but Caesars has long been an operational disaster, and he's done nothing to fix it. Unfortunately the merge between Harrah's and Caesars joined together two companies that were strong on marketing and weak on operations, so the situation persisted.

Many Caesars employees (and I'm talking about all of their properties, not just Caesars Palace) hate their jobs because of the horrendously bad interdepartmental communication, confusing internal computer systems, and just downright poor operational direction from the very top.

The vaunted Total Rewards program itself, while popular with customers, is a confusing and often contradictory mess, to where Caesars employees themselves rarely fully understand it.

One time when discussing Caesars with Brandon, I told him, "It's Caesars. If there's a way to possibly fail while doing something, they'll find it." Sadly, that's not an exaggeration.

The company has essentially made two smart moves under Loveman's regime: They created the popular Total Rewards program, and they bought the lucrative World Series for almost nothing from struggling Binion's.

However, between the ill-advised expensive projects (LOL High Roller ferris wheel), the crippling debts, the piss-poor operations, and the frequent inability to judge the marketplace, Caesars has been a disaster. Loveman should have been shown the door a long time ago, but he continues to run this sinking ship further into the deep ocean of fail.

[Dan Druff]

There is also an issue of lack of empowerment in day-to-day operations at Caesars properties.

To put it simply, many customers -- including high-limit whales and semi-whales -- run into silly bureaucratic or operational messes, get frustrated, and nobody is empowered to correct these in a timely fashion. I can't tell you how many high limit degenerates I've known who have sworn off Caesars properties because they make so many mistakes and have such a bitch of a time correcting them.

Hosts and managers are not empowered enough to fix these issues, and it just drives people away.

[Shizzmoney]

I'm not sure how Gary Loveman has kept his CEO job. He was a professor at Harvard before he took the head job at Harrah's and was at the helm when the Caesar's buy out occurred. Very few CEO's have been given this much rope. The company has been in the financial toilet for years mostly for all the debt he bought with Ceasar's. How does the board of directors not make a change?

Connections in state legislature and in Congress (he's an MIT guy from MA). Hence why Caesar's bankruptcy will have lube (and why your small business won't).

Loveman also is a part of a Social Security cuts advocacy group called, "Fix the Debt". http://t.co/pB0TzUfCDE No matter what your feelings on SS are, the fact he wanted to cut the income stream of a big portion of his customer base (seniors who are retired) is pretty fucking LOL

[DannyDeadWood]

Todd,

I found this Video of a talk Loveman gave last year to some MBA's. If you don't mind killing 52 minutes of your life.....A few things that stuck out. Like most CEO's his impression of reality and reality are not one in the same. He is claiming he is the pioneer of Customer Rewards programs, His biggest career F'up was not getting into Macau. To bad no one had the balls to ask a tough question during the Q&A.

[Dan Druff]

Update:

Caesars to lay off 1% of the workforce.

Can't imagine that will help much.

http://www.reviewjournal.com/busines...less-1-percent

[JSTAT]

A masked JSTAT is disgusted with Caesars Entertainment's CEO Gary Loveman's statement of "deleveraging", which is to say bankruptcy is imminent after shifting its profitable assets to shell companies on Caesars 11/10/14 conference call.

Caesars Entertainment Operating Company (CEOC) or Caesars Entertainment Corporation (NASDAQ: CZR) has rearranged the deck chairs of the Titanic for its imminent bankruptcy by adding spin-off companies Caesars Entertainment Resort Properties ("CERP") and Caesars Growth Partners, LLC ("CGP") to its third quarter 2014 balance sheet. A 3 card monte game where former profitable CZR properties are protected during a future bankruptcy.

Caesars (CZR) integrated the Total Rewards loyalty program into CIE's (Caesars Interactive Entertainment) real-money online gaming platform (which includes the World Series of Poker - WSOP) into Caesars Growth Partners (CGP) along with Horseshoe Baltimore Casino (co-owned with Dan Gilbert's Rock Gaming), Bally's Las Vegas, The Cromwell Las Vegas, Harrah's New Orleans, Planet Hollywood Las Vegas, and The LINQ Hotel & Casino Las Vegas.

Caesars Entertainment Resort Properties (CERP) owns The Flamingo Las Vegas, Harrah's Atlantic City, Harrah's Las Vegas, Harrah's Laughlin, Paris Las Vegas, and Rio All-Suites Hotel & Casino in Las Vegas

When Caesars Entertainment files for bankruptcy, bond holders such as public pensions CalSTRS (California State Teachers' Retirement System) and CalPERS (California Public Employees' Retirement System) stands to lose all of its investment in Caesars Entertainment (CZR). The taxpayers in California will get the shaft while Caesars private equity owners Apollo Global Management and TPG Capital will get the gold.

When Caesars Entertainment (CEOC) files for Chapter 11 Bankruptcy, it will be left domestically in the United States with Bally’s Atlantic City, Harrah’s Reno, Caesars Atlantic City, Harveys Lake Tahoe, Caesars Palace Las Vegas, Horseshoe Bossier City, Harrah's Gulf Coast, Horseshoe Council Bluffs, Horseshoe Hammond, Harrah’s Joliet, Horseshoe Southern Indiana, Harrah’s Lake Tahoe, Horseshoe Tunica, Harrah’s Metropolis, Hot Spot Oasis, Harrah’s North Kansas City, Louisiana Downs, Harrah’s Philadelphia, and Tunica Roadhouse.

Of course the private equity owners of Caesars Entertainment, Leon Black, CEO Apollo Global Management and David Bonderman, co-founder TPG Capital, will control this shell game as "Sponsors" of Caesars Enterprise Services, LLC ("CES"). Caesars Enterprise Services, LLC is a services joint venture among CEC, CEOC, CERP and Caesars Growth Properties Holdings, LLC ("CGPH").

[Shizzmoney]

Look, a dumpster fire:

Caesars Entertainment Corp. (CZR), the most-indebted U.S. gaming company, presented a plan to creditors that would restructure the obligations of its biggest unit by turning it into a real estate investment trust.

The proposal would convert Caesars Entertainment Operating Co. into a property company that owns its casinos and a unit that would manage them, according to a regulatory filing today. Caesars said it remains in talks with creditors and that the blueprint is “outdated.”

Caesars is trying to wrangle the support of dozens of creditors holding $18.4 billion of debt to try to push through a pre-arranged bankruptcy plan. The casino operator, taken private for $30.7 billion by Apollo Global Management LLC and TPG Capital in 2008, has lost money every year since 2009 and struggled to meet its debt payments.

The Las Vegas-based company was forced to reveal its proposal after lender Silver Point Capital LP exited restructuring talks, becoming at least the second to do so in the last month, people with knowledge of the matter said today.

http://www.bloomberg.com/news/2014-1...into-reit.html

[Shizzmoney]

Caesars Warns Creditor Lawsuits Imperil Going-Concern Status

http://www.bloomberg.com/news/articl...concern-status

(Bloomberg) -- Caesars Entertainment Corp., the casino company whose largest unit is in bankruptcy, warned that lawsuits stemming from its restructuring efforts could endanger its ability to continue operating as a going concern.

If creditors of the subsidiary were to prevail on claims that the company improperly shifted assets from their reach and stripped them of a parent-company guarantee, the outcome “could have a material adverse effect on our business, financial condition, results of operations and cash flows,” the Las Vegas-based company said Monday in a regulatory filing. Caesars shares fell 2.4 percent to $9.39, the lowest since October.

b/t this and a potential Fed rate hike in June or October, those TR points might dry up quick!

[Sanlmar]

I wouldn't touch CZR.

But this is turning out to be a fascinating read.


Druff's Total Rewards Program is the single most valuable asset under dispute in the bankruptcy fight, according to the creditors’ valuations, trumping various Las Vegas properties and Caesars’ online gambling business.

Lol, player data is the biggest asset, claim the bond holders.




I always gave the Total Rewards conversation half an ear. So the last laugh is on me as this turns out pretty much to be the life or death of Caesars going forward. It's all about the data that isn't debt ridden like everything else.

I didn't realize there was a Total Rewards credit card that they were data mining too. Rascals.

To me, Gary Loveman was always just the fat CEO of a loser casino who appeared in the funny responsible gaming ads.

Turns out to be a fascinating story of a Harvard geek gone to Vegas like the MIT characters in the movie 21. Both ended up getting their shit packed in.

[Sanlmar]

Great Loveman article

How a math wizard from Harvard led Caesars down a path of expansion and debt
https://www.baltimorebrew.com/2014/0...sion-and-debt/

[Dan Druff]

Here's a copy of the filing:

http://ftalphaville.ft.com/files/201...omplaint-1.pdf

The most valuable asset single asset is Total Rewards ($1 bn) but the most valuable of the transferred assets was the combo of Cromwell/Bally's/Quad ($1.6 bn).

However, Total Rewards was transferred over for no payment, which makes the shortfall $1 billion, according to the lawsuit, while Cromwell/Bally's/Quad was transferred for a fairly close value ($1.4 bn).

[Sanlmar]

Here's a copy of the filing:

http://ftalphaville.ft.com/files/201...omplaint-1.pdf

The most valuable asset single asset is Total Rewards ($1 bn) but the most valuable of the transferred assets was the combo of Cromwell/Bally's/Quad ($1.6 bn).

However, Total Rewards was transferred over for no payment, which makes the shortfall $1 billion, according to the lawsuit, while Cromwell/Bally's/Quad was transferred for a fairly close value ($1.4 bn).

I stand corrected.

Total Rewards is the biggest asset "under dispute".

I got carried away with a little hyperbole that night. Great story with a surprising twist.

Caesars loses 5 million a day. When Boston barred Caesars from the Logan airport bid it was like refusing to serve the drunk at the bar. They were doing Caesars a service.

Call a cab for Gary Loveman.

On the flip side, I hate to see George Soros taking a stake in CZR. I want to see implosions across the country. But Soros is brilliant and über powerful. Rarely loses.

The Cromwell would make great public housing for the Vegas homeless.