It’s Chicken Little time at Caesars Entertainment, where the company is sketching gloom-and-doom scenarios unless the court system goes along with its preferred 
timeline for a prepackaged bankruptcy. “If you go to the earlier filing day, you likely jettison the [restructuring support agreement],” said a Caesars attorney, referring to the Jan. 12 involuntary bankruptcy filing being pushed by junior bondholders. “Aren’t you sort of manufacturing a restructuring agreement that in fact has holes all through it as a basis for venue,” U.S. Bankruptcy Judge Kevin Gross asked him. Caesars also had to ‘fess up that its Chicago filing was being conducted under the auspices of an affiliate, Des Plaines Development, that is perfectly solvent.
In Wilmington, Gross is weighing arguments as to whether he should hear the Caesars case or yield to the Chicago court (a decision upon which the entire case could swing). The question of why the case is not being heard in Las Vegas is simply being begged. With winter storms laying waste to the East Coast (and Caesars’ Atlantic City casino revenues, one suspects), Gross will resume arguments by telephone next week. Whatever happens, it won’t be cheap for Caesars: Even before there were two bankruptcies filed, Fitch Ratings had pegged the cost of the case at $800 million.
What to do? Hold a fare sale, of course! And almost none of it will go to second-tier creditors.
* Caesars’ clout in New Orleans isn’t what it used to be. A city ordinance to ban smoking in public places passed unanimously. Then Councilwoman Nadine Ramsey tried to insert a partial exemption for Harrah’s New Orleans and other “places of employment.” Reported the New Orleans Times-Picayune, “Such changes likely would have gutted the new law by allowing any establishment selling tobacco products or operating as a legal casino to dodge the ban.” Caesars representatives vainly pleaded for exceptions for nicotine vaporizers and electronic cigarettes. However, when Mayor Mitch Landrieu made it clear that Ramsey was freelancing policy, her proposal collapsed like a pup tent. You can’t win ’em all.
* Fontainebleau has been put out of its misery … legally speaking. Developer Jeffrey Soffer was suing the bankrupt project for $675 million and creditors were suing Soffer for $2 billion. As settled, Soffer will get nothing, he’ll pay $2.5 billion out of his own pocket and insurers will pay another $25 million. Said a Soffer attorney, “This settlement brings to an end the issues that arose from the unfortunate circumstances surrounding the Fontainebleau Las Vegas project … The Soffers are now able to put this chapter behind them and look ahead to future projects.” Yeah, but the building’s still there, albeit it’s Carl Icahn‘s problem now.
