Caesars Entertainment Corporation (CEC) and Caesars Entertainment Operating Company (CECO) and its Chapter 11 debtor subsidiaries (collectively, “the Debtors”) jointly announced their entry into restructuring support agreements (RSAs) with representatives of all of CEOC’s major creditor groups. The release also announcing that all parties have agreed to the terms of the Debtors’ Third Amended Joint Plan of Reorganization (the “CEOC Plan”).
The RSAs represent a key milestone in CEC and CEOC’s effort to implement a consensual restructuring for the Debtors. The RSAs with the first lien bank lenders, first lien noteholders, second lien noteholders and holders of subsidiary guarantee notes are effective immediately.
The key economic terms of the RSAs are substantially similar to the previously announced term sheet. The RSAs are subject to termination in certain circumstances, including, but not limited to, should the injunction in respect of the guaranty litigation against CEC no longer be in place and if the CEOC Plan has not gone effective before a certain date in 2017. In addition, the RSA with first lien noteholders will terminate automatically on October 14, 2016, unless, prior thereto, the parties have reached an agreement on certain additional documentation in connection with the CEOC Plan. The guaranty litigation pending against CEC was stayed through the earliest of (a) the first omnibus hearing after the Court confirms or denies the CEOC Plan, (b) the termination of the Second Lien RSA and (c) a further order of the Court, in a hearing in the U.S. Bankruptcy Court.
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