Caesars Entertainment Corporation and Caesars Entertainment Operating Company revealed that the New Jersey Casino Control Commission gave the green light to CEOC to proceed with its restructuring plan. The rulings of the Commission are quite important for the operator, as it would provide it with the chance to complete its ongoing restructuring.
As mentioned above, the New Jersey Casino Control Commission ruled in favour of the casino-entertainment provider. Under that ruling, the entities that will hold the ownership of the real property assets will be granted with a special licence related to them serving as landlords under a Lease Agreement. In addition, the Lease Agreement between the entities and Bally’s Park Place and Ceasars Atlantic City was also approved by the Commission.
The restructuring and the merger of the Caesars Entertainment and Caesars Acquisition Company also require further approval of certain matters in order to be officially finalised. It is the New Jersey Division of Gaming Enforcement and the Commission that are the competent authorities which approvals are required in order for the process to finally come to an and. The casino-entertainment provider shared that these authorities are expected to make their rulings by the beginning of the third quarter of 2017.
The restructuring and reorganisation plan is part of Caesars Entertainment Operating Company’s attempt to cope with bankruptcy. The approval of the New Jersey Casino Control Commission is to give the operator the right to lease the operation of two of its casinos in the state to a subsidiary which is expected to be established soon.
The Chairman and Chief Executive Officer of the New Jersey Casino Control Commission, Matthew Levinson, commented on the current state of the casino industry f Atlantic City, saying a certain turnaround was observed. Mr. Levinson also shared his hopes for the future and explained that Caesars and Bally’s would be able to focus on further business expansion as soon as the restructuring process was finalised.
CEOC officially filed for Chapter 11 bankruptcy protection more than two years ago. At that time, the casino-entertainment operator cited long-term debt estimated to $18.4 billion. At first, the company made an attempt to dispose of its junior creditors, but unfortunately, the latter filed a large number of lawsuits against the operator.
The restructuring plan of CEOC paved the way for the operator to split its operations into two separate entities in order to deal with bankruptcy, without REIT being required to obtain a full casino license. Still, it would be required to apply for a Casino Service Industry License. Completing the reorganisation is expected to help Atlantic City casinos to consolidate their positions and gain financial stability.
Under the reorganisation plan, Caesars is to split the company into an operating entity and a real estate trust, with the latter required to lease operations to a newly-created subsidiary.
- Author
Daniel Williams
