Hedge Funds Seek To Stop Caesars Casino Sale

A group of hedge funds accuses Caesars Entertainment of illegally trying to get out of a bad bet.
Appaloosa Management, Canyon Capital and Oaktree Capital Management, all Caesars creditors, plan to go to court to stop Caesars from selling four casinos to another Caesars-owned company. The hedge funds allege that the sale is designed to help Caesars skirt required loan payments.
Caesars, which is owned by Apollo Global Management and TPG Capital, said it would use some of the $2.2 billion in proceeds to reduce its debt load. The hedge funds argue that the company has to use all of the proceeds to pay creditors—and that the asset transfer is illegal, anyway.
The hedge funds plan to cite Carl Icahn’s 2012 battle with utility company Dynegy. A bankruptcy court found Dynegy’s asset transfers to likely be illegal.
Caesars accused the hedge funds of attempting to sabotage its revival, noting that “many have positions, evidenced by $27 billion in outstanding credit default swaps, which motivate them to bet against its future success,” the company said.