Caesars Entertainment Corp. (NASDAQ: CZR) kicked off the week by watching its shares take a dive following an unfavorable ruling in bankruptcy court. A Chicago judge in the U.S. Bankruptcy Court system ultimately ruled that Caesars would not be shielded from roughly $11 billion in bondholder lawsuits against the company.
The operating company of the Caesars’ organization filed for bankruptcy back in January 2015. As only a subsidiary, Caesars was looking to halt these lawsuits that are being claimed against the non-bankrupt parent company.
However, at that time Caesars merged with its property acquisition company, just before the operating unit filed for Chapter 11 protection. The merger reduced Caesars debt from nearly $23 billion and gave the company some hope of weathering the storm.
After the merger, creditors claimed that Caesars dealt with them unfairly before the operating unit’s bankruptcy filing by moving assets to other affiliates and out of creditors’ reach.
The primary architects of this lawsuit are none other than David Tepper’s Appaloosa Management, Apollo Global and TPG Capital. As the creditor, Appaloosa is making the case that Caesars reneged on its agreement to make good on its debt.
Caesars has been in a rough patch for the past few years after the stock topped out around $26 in 2014. Since that time it has been plagued by debt and complications in China (Macau).
Excluding Monday’s move, the stock was down around 5% year to date. The numbers get worse looking at the past 52 weeks, with the stock down 13.5%.
Shares of Caesars were down 16% at $6.31 Monday morning, with a consensus analyst price target of $8.00 and a 52-week trading range of $5.39 to $9.91. Shares were indicated down as sharp as 30% in premarket trading.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
