According to the U.S. Bankruptcy Court docket, Caesars Entertainment Operating Company filed a Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “Under the Plan, the Debtors will reorganize pursuant to a dual OpCo and PropCo structure. Subject to certain exclusions, the Debtors will contribute substantially all of their U.S.-based real property assets to PropCo (including PropCo subsidiaries) (the ‘Contributed Properties’), and PropCo will lease back most of those assets to OpCo in exchange for annual lease payments on the terms set forth in the Master Lease Agreement. The Debtors’ contribution of real property assets to PropCo will be completed through either the Spin Structure or the Partnership Contribution Structure. The Debtors believe that this real estate investment trust structure will enable them to unlock substantial value for the benefit of their stakeholders given the relatively favorable valuations associated with such entities as opposed to traditional gaming companies.”
The Disclosure Statement continues, “Except to the extent a Holder of an Allowed Prepetition Credit Agreement Claim agrees to less favorable treatment, each such Holder will receive a 100 percent recovery, comprised of such Holder’s Pro Rata share of: $705 million in Cash, $883 million of (a) additional Cash out of the proceeds, if any, of the OpCo First Lien Financing Option or (b) if the Debtors are not able to exercise the OpCo First Lien Financing Option the OpCo First Lien Term Loan, $406 million of the OpCo Second Lien Notes, and $1,961 million of the PropCo First Lien Term Loan.” Learn more about the CEOC bankruptcy.