Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Federal Judge Declares Examiner Must Look Into Caesars Asset Transfers
Author: Joel R. Glucksman
Date: March 24, 2015
Key Contacts
Back
A U.S. bankruptcy judge decided March 12 that an independent examiner must investigate transactions that involve one of Caesars Entertainment Corp’s operating units.
Earlier this year, Caesars Entertainment Operating Co. filed for Chapter 11 bankruptcy protection, but before taking this legal action, it participated in several intercompany deals, according to Reuters. Before the company filed to obtain protection from its creditors, it switched ownership of many of its casinos and other valuable assets to affiliates of its parent company.
This did not sit well with its creditors. According to them, Caesars Entertainment Corp. transferred these assets illegally, in an attempt to insulate them from the demands of its creditors and to benefit Apollo Global Management and TPG Capital Management, the private equity firms that own them, the media outlet reported. On March 12, U.S. Bankruptcy Judge Benjamin Goldgar stated that the examiner must look into “any apparent self-dealing or conflicts of interest involving the debtors or their affiliates.”
Both Caesars Entertainment Corp. and its operating unit currently face four lawsuits, according to The Wall Street Journal. While these legal claims are slightly different, they all share the common allegation that the two companies moved assets around to benefit the organizations owning them, which came at the expense of resources that could go to pay creditors’ claims.
In an effort to get the lawsuits dismissed, the two defendants have contended that if the legal action continues, it will greatly reduce the ability of the entertainment company and its operating unit to pay creditors, the media outlet reported.
More specifically, it was stated that “it would be nearly impossible for CEC to provide any substantial contribution to a reorganization, including the $1.5 billion that it has agreed to contribute,” according to the news source.
The examiner, to be appointed by the U.S. Trustee, will be responsible for evaluating several intercompany deals, Reuters reported. Currently, creditors are disputing the transfer of the Octavius Tower in Las Vegas during 2013, the exchange of the operating unit’s stake in online gaming businesses in 2011 and the transfer of several casinos during 2014.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
Author: Sean M. Pena
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Author: Nicholas Wall
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.