Caesars Back in Bankruptcy Court

Casino and Gambling

By Christopher J. Somma

Caesars Entertainment Operating Co. Inc. (“Caesars”) appeared in bankruptcy court for the third time this year to request that creditors be stayed from seeking an $11 billion dollar judgment against the casino operator’s nondebtor parent. The original stay was set to expire on August 29, 2016. Caesars hoped to convince United States Bankruptcy Court Judge A. Benjamin Goldgar to extend the stay until a Plan of Reorganization is approved. However, the situation was exacerbated by the fact that the Plan Confirmation hearing is not scheduled until January 2017. Judge Goldgar initially denied a stay request in July 2015, but the Seventh Circuit sent the case back to him where he then decided to grant a temporary stay preventing two lawsuits from going to trial. Since then all of the lawsuits were sent to United States District Court Judge Jed S. Rakoff who is ready to hear competing Motions for Summary Judgment beginning on August 30, 2016, in all but one of the cases which already settled. Originally, the competing Motions for Summary Judgment were scheduled in June, but were stayed due to Judge Goldgar’s temporary order.

Despite Caesars’ efforts, on Friday, August 26, 2016, Judge Goldgar rejected pleas to protect the casino from the creditor lawsuits. This decision was appealed to the United States District Court and on August 29, 2016, District Court Judge Matthew Kennelly issued an order extending the stay through September 16, 2016.

The bankruptcy case is In re: Caesars Entertainment Operating Co. Inc. et al., case number 1:15-bk-01145, in the United States Bankruptcy Court for the Northern District of Illinois.

The appeal is In re: Caesars Entertainment Operating Co. Inc. et al., case number 1:16-cv-08423, in the United States District Court for the Northern District of Illinois.

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