A US bankruptcy judge has suggested TPG Capital Management and Apollo Global Management should chip in to help restructure Caesars Entertainment Operating Company in its Chapter 11 case, according to news reports.
The company’s current reorganisation plan includes a $4 billion payment from non-bankrupt parent Caesars Entertainment Corporation (CEC) but not from TPG or Apollo.
The two investment behemoths acquired Caesars in a massive $30.7 billion leveraged buyout in 2008. Creditors include FS Investment Corporation, the Franklin Square business development company sub-advised by GSO Capital Partners.
“Why should a successful reorganisation depend on contribution from CEC alone?” Judge Benjamin Goldgar asked at a hearing, Reuters reported.
The idea of Apollo and TPG contributing had been floated before, according to press reports. An advisor to Caesars said in a court hearing in June it was a possibility. The CEC money is being contributed to settle fraud claims, according to the court papers, which Apollo and TPG have denied.
CEOC won approval for its plan outline in June, setting it up for a confirmation hearing in January where it would seek the final OK for its reorganisation plan before the gaming magnate can exit Chapter 11.