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Caesars Entertainment's operating unit files for bankruptcy

The operating unit of Caesars Entertainment Corp, the largest U.S. casino company, filed for Chapter 11 bankruptcy on Thursday to implement its plan to cut $10 billion of debt.

The company said it has the support of its senior noteholders to implement the plan, which will reduce the operating unit's debt to $8.6 billion from $18.4 billion.

Caesars Entertainment Corp.'s Caesars Palace in Las Vegas.
Sam Hodgson | Bloomberg | Getty Images
Caesars Entertainment Corp.'s Caesars Palace in Las Vegas.

The bankruptcy protection was filed by Caesars Entertainment Operating Company Inc and several affiliates in the U.S. Bankruptcy Court for the Northern District of Illinois.

They listed assets and liabilities of over $1 billion, according to the filing.

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Much of the debt is a legacy of the $30 billion leveraged buyout of Harrah's Entertainment that was led by Apollo Global Management and TPG Capital in 2008.

Under the plan, the operating unit will be split into a casino company and a real estate investment trust. The company does not anticipate closing any of its 44 casinos under the plan.

Caesars Entertainment, Caesars Entertainment Resort Properties and Caesars Growth Partners, which are separate entities with independent capital structures, have not filed for bankruptcy relief, the casino company said in a statement.

Properties across the entire Caesars network are open and will operate without interruption throughout the reorganization process, the company said.

Caesars named Randall Eisenberg, a managing director at AlixPartners, as the Chief Restructuring Officer of CEOC.

The bankruptcy plan is opposed by junior noteholders as they will get less than 10 percent of the $5 billion they are owed.

The junior noteholders filed an involuntary bankruptcy against the operating unit in the U.S. Bankruptcy Court in Wilmington, Delaware on Monday. They are expected to ask to move the Chicago case to the Delaware court.

The case is in the U.S. Bankruptcy Court, Northern District of Illinois; Case no: 15-01143.