Troubled casino operator Caesars Entertainment Corp. (CZR) has been hit with a 207-page lawsuit by UMB Bank NA, the trustee for $1.25 billion in 8.5% senior secured notes due Feb. 15, 2020, which is alleging "unimaginably brazen corporate looting."
The lawsuit was filed Tuesday in the Delaware Chancery Court against private equity-backed Caesars, based in Las Vegas, as well as its operating unit, Caesars Entertainment Operating Co. (CEOC), and other subsidiaries, including Caesars Entertainment Resort Properties LLC, Caesars Acquisition Co., Caesars Growth Partners LLC and Caesars Enterprise Services LLC.
In filing the lawsuit, UMB is seeking the appointment of a receiver for CEOC.
Several Caesars executives, including Caesars CEO and chairman Gary Loveman, and Caesars general counsel, Michael Cohen, were also named in the suit.
According to the lawsuit, "This is a case of unimaginably brazen corporate looting and abuse perpetrated by irreparably conflicted management."
A UMB spokeswoman Wednesday declined comment, but the trustee said in the lawsuit that Caesars has "stripped CEOC of eight of its most valuable hotel, casino and entertainment properties — including a six-property stronghold in the heart of the Las Vegas Strip — on terms that were patently unreasonable in order to enrich themselves at the expense of CEOC's creditors."
UMB is alleging that Caesars has robbed CEOC of more than $4 billion in value, "leaving CEOC's longstanding creditors with no hope of being repaid."
Caesars spokesman, Stephen Cohen at Teneo Strategy, responding early Tuesday evening, said by phone, "We believe the claims in this lawsuit are baseless and that this filing is an attempt to derail constructive talks that the company is having concerning a restructuring of CEOC and we will defend ourselves vigorously."