Caesars Avoiding Bankruptcy

Caesars Entertainment and their subsidiary Caesars Entertainment Operating Company (CEOC) have reached a preliminary debt restructuring agreement with some of their creditors.

CEOC is already in bankruptcy, and this agreement is a step towards preventing the parent company Caesars Entertainment from sliding into bankruptcy as well.

Caesars already has a restructuring plan in place which calls for the company's real estate to be split off into a REIT, but needs creditors to agree to the plan in order to proceed. This latest agreement gives creditors more incentives than Caesars was offering before.

The whole thing is very confusing, but it looks like the Caesars Entertainment parent company will likely avoid bankruptcy. Wall Street certainly thinks so, as Caesars stock was up $1.47 to $8.02 (+22.44%) today on the news.

UPDATE: July 22, 2015 - What a difference a day makes. Yesterday Caesars was up 22% on positive bankruptcy news. Today it received a negative bankruptcy ruling and the stock plunged a whopping 40% all the way down to $4.76 a share.

My note yesterday of "it looks like the Caesars Entertainment parent company will likely avoid bankruptcy" looks to be outdated already, and bankruptcy for the parent company seems like a real possibility now. My guess is that Caesars will continue negotiations with creditors to avoid bankruptcy but we shall see.