Future of Caesars Entertainment remains murky
By J.D. Morris, Las Vegas Sun
More than six months after a major division of Caesars Entertainment Corp. filed for bankruptcy, it’s still unclear exactly how the company will emerge on the other side.
Caesars wants a Chicago bankruptcy court to approve a restructuring plan that could shed around $10 billion in debt from the division, but lawsuits from some of the company’s creditors continue to complicate things. One recent court decision in particular threatens to create big problems for the entire casino company.
If Caesars’ plan is successful, the division that filed for bankruptcy will be reorganized under a real estate investment trust setup that will split it into two parts: one that owns casinos and another that manages them. That setup would have Caesars follow in the footsteps of other casino companies — including Penn National Gaming, the company buying the Tropicana — that have made similar moves toward real estate investment trusts.
Harrah’s Reno, Harrah’s Lake Tahoe, Harveys Lake Tahoe, Caesars Atlantic City and Bally’s Atlantic City were among the properties included in the bankruptcy filing in January.
So courts are funny things. (Using some gambling analogies here.) They can be crap shoots.
Thus, it’s possible Caesars can pull out of this with the current owners having some equity? But right now, looking at the latest rulings, the odds are looking slim!
Best case scenario, the as currently constituted Caesars Corp. will drift along for a minimum of another year. Again, that’s best case for them!
But quite possibly, Caesars is doomed as a corporation!
Either way, South Lake Tahoe gets hurt in the process! Thus, please do the town a favor, and yourself as well, Caesars. Raise some cash by selling your Tahoe casinos! Or at the very least, sell either Harveys or Harrah’s, so our community is less weighed down by your troubles!
Parker,
Sell them to whom? I hear this all the time. Sell Harveys. Sell Harrahs. Where are you going to find a buyer for either of these properties. The only way they are able to stay open now is by bringing in large play from their other properties. There is just not enough “retail” business to keep them going.
The biggest problem (economically) in this area is that it was established at a time when gambling was only legal in Nevada. Things have changed drastically over the years. Gaming is everywhere now. Like being able to eat ice cream whenever you want instead of having to wait for the ice cream truck. It looses it’s glamour. South Shore now has too many casinos, too many small hotels and motels, not enough work for full time employees, housing costs that are out of reach for the average family, and inept leadership. Good luck talking someone into investing into that scenario.
Legitimate comments. But if you have people that want to own & operate the 2nd set of casinos as one crosses the Stateline, gotta believe there’s demand for the first set of casinos as a Californian enters Nevada.
And again legitimate points Haddi. But I believe what I’ve heard when told of specific interest in those casinos from certain companies.
Parker, Hadd(it), et al:
The simple truth is, they need the cash flow from both Harvey’s & Harrah’s to service the immense debt they took on in their ’empire-building’ – – how exactly does a business that deals only in money as their only product end up in this predicament ?
MIS-MANAGEMENT. . .only along with all the other casinos that were bought up by Promus, then Harrah’s, then Caesar’s, again – deciding on Caesar’s as a name because it was always associated with “high-rollers”, when it became apparent they needed them, as most disposable income was trashed for the multitudes that used to relish spending more than they can afford now. . .
The writing was on the wall, but in true hubristic fashion: let’s keep buying some more (!). . .that we really can’t afford. . .
A true American virtue: borrow your way out-of-trouble, especially fiscal trouble. . . then dump your problems in the courts because it’s “legal” – let the lawyers decide if you’re in business or not. . .not as entrepreneurial (like Harvey & Bill), but because we’re ‘corporate’ & shielded…
Is it really a surprise that some don’t want to be left holding an empty bag. . .? While the fiasco continues on ?