Caesars Entertainment Corp. boosts offer to creditors

Caesars Entertainment Corp. boosts offer to creditorsCaesars Entertainment Corp. is offering dissident creditors a package worth about $4 billion to get its operating unit out of bankruptcy.

The latest offer was spelled out in an updated reorganization plan filed Wednesday in a Chicago bankruptcy court by Caesars Entertainment Operating Co. Previously, Caesars said it was willing to pay $1.5 billion in a combination of cash, stock and debt.

Under the new proposal, Caesars would give up to 47.5 percent of stock in a reorganized company to creditors and contribute $406 million in cash, $1 billion in convertible notes and a discount on rights to buy $500 million worth of stock.

To collect, lower-ranking creditors of the operating unit would have to drop lawsuits against the Caesars parent, known as CEC, that they say could be worth much more than $4 billion. An investigation by a court-appointed bankruptcy examiner concluded creditors could get as much as $5.1 billion through lawsuits.

The latest plan avoids “the risks of potentially value-destructive litigation,” the operating unit said in court papers. The proposal would let the unit exit bankruptcy by “securing substantial contributions from CEC and its affiliates to support significant near-term recoveries.”

Phil Hevener has been writing about the Nevada gaming business for more than 30 years. Email: 

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