Anybody who is familiar with the way the arena of Landbased gambling and world of online casino gambling knows that unpredictability is in the air. However, when one of the biggest entertainment companies goes bankrupt, it is something you need to dissect thoroughly as it speaks to the gaming industry as a whole entity.

Two years ago the world was taken by surprise when the operating unit of Caesars Entertainment had to plead Chapter 11 bankruptcy in January 2015. Owning the World Series of Poker gave Caesars a lot of fame which turned to dust when they faced financial troubles.

However, now two years later, this famous casino company is ready to launch itself in the market again after successfully overcoming the bankruptcy. They announced this after the federal court approved it way back in the beginning of the year.

How did the bankruptcy come to be?

Apollo Global Management and TPG Capital, like a number of other private equity firms, decided to purchase some companies which were showing potential as loans were particularly easy to attain then. They relied heavily on debt and in this scenario, they found that the gambling industry was one that deserved to be looked into.

They sketched up a deal to buy Caesars, and the announcement came back in 2006. The final agreement was made, however, much later in January 2008. When this development took place, nobody has thought that the Lehman Brothers would soon be embroiled in bankruptcy which would be a mighty blow to the casino industry on a whole.

This $30bn deal consisted of two well-reputed firms undertaking an existing debt that crossed the $10 billion thresholds. They were counting on the billions of dollars more they had in the form of bonds for the required payment. However, even before the year ended, Caesars began firing its staff and making cuts so they could manage the interest payments.

The Caesars’ empire started coming crashing down slowly as they were struggling to find a new cash source. All their 50 casino-hotels were at risk, and the company had been running on losses for more than few years. They still managed to open newer outlets, balancing it by shifting other assets. Some disgruntled creditors tried to force them into bankruptcy.

After some deliberation, Caesars Entertainment filed for their Section 11 bankruptcy appeal in 2011.

Fast-forward to 2017

According to the latest announcements of the Caesars Entertainment and Caesars Entertainment Operating Company (CEOC), the states of Louisiana and Missouri have gone ahead and granted the licenses and regulatory approvals CEOC needed for their much-needed reorganization. Gaming regulators in Illinois, Indiana, Iowa, Nevada and Pennsylvania have also given the necessary approvals to Caesars Entertainment.

The original bankruptcy case had been filed with almost $18 billion worth of debt in their accounts. Under the new restructured plan, close to $10 billion of the debt is absolved. Caesars Entertainment believes that they are a stronger company now for the storm they have weathered. They have a definite plan in place for growth and investment pertaining to the company now that they will be able to restart their casino-hotel business in full swing.

Crucial Steps Taken

Most of their U.S.-based casino real estates have been sold to VICI Properties, Incorporated by the new, reinvigorated version of Caesars. They plan to use the investment trust to rent the property, but Caesars will still be in charge of managing all operations in case of their gaming businesses. The company has also made their objective to expand public which is ambitious, but doable as they have managed not only to beat bankruptcy but also exit the pit with $2 billion.

There has also been a press release according to which all major gaming authorities have approved of this step. CEOC has all the essential permissions for its restructuring. This will also help make the merger of Caesars Acquisition Company with its parent company a reality. The successful closing of the merger was tied customary closing conditions.

The new Board of Directors at the Caesars Entertainment Corporation (CEC) is ready to take the helm and revamp the company. Under the leadership of James S Hunt, Caesars is expected to turn its fortune around. An Ernest & Young leadership executive, Hunt has gathered loads of experience and knowledge about business and especially corporate governance over the years. CEC President & CEO, Mark Frissora, will be answerable to Hunt and his board of directors.