NEW YORK (TheStreet) -- Shares of Caesars Entertainment (CZR) were tumbling 9.83% to $6.79 in after-hours trading on Friday as a Chicago bankruptcy judge ruled that the Las Vegas-based casino and hospitality services company must face numerous bondholders' lawsuits, Reuters reports.
Bondholders have brought approximately $11 billion in claims against the bankrupt parent company of Caesars Interactive Entertainment and other subsidiaries. The bondholders want to use the lawsuits as a means of boosting their recoveries above the 34% offered by Caesars, according to Bloomberg.
Caesars had previously asked U.S. Bankruptcy Judge A. Benjamin Goldgar to extend a ban on the lawsuits, arguing that a shield was crucial to making headway on a settlement with creditors.
The judge decided Friday that halting the lawsuits wouldn't help the company settle with bondholders, Bloomberg reports.
A group of second-lien bondholders is the only large group of Caesars creditors that has failed to sign onto an agreement reorganizing the bankrupt casino operator.
Earlier this week, Caesars asked its majority shareholders, Apollo Global Management (APO) and TPG Capital, for $990 million to help lift it out bankruptcy.
The private equity firms have so far refused to provide the funds.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
TheStreet Ratings team rates Caesars Entertainment as a Sell with a ratings score of D. This is driven by a few notable weaknesses, which the team believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share.
You can view the full analysis from the report here: CZR