David Tepper is the favorite to win an $11 billion lawsuit against Caesars Entertainment. That’s according to the mediator trying to hammer out a deal between the casino giant and holdout creditors in the contentious bankruptcy of Caesars’ biggest operating unit. Creditors, including Tepper’s Appaloosa Management, have sued Caesars in New York, accusing the parent of reneging on guarantees to pay debt issued by the operating unit before it filed for bankruptcy in January 2015.
Chicago bankruptcy Judge Benjamin Goldgar on Friday refused to extend a stay that shielded Caesars from creditor suits while it negotiates a restructuring plan. The freeze expires Monday, a day before Caesars faces a potential ruling in the New York case. The mediator, Joseph Farnan Jr.
told Caesars’ lawyers he believed the judge in that suit was prepared to rule against Caesars on Tuesday, said a source briefed on the discussion. Manhattan federal Judge Jed Rakoff has scheduled oral arguments for 4 p. m.
which doesn’t allow much time. Farnan’s takeaway is that the judge’s mind is made up, the source said. Caesars, owned by Leon Black’s Apollo Global Management and TPG Capital, and the creditors have filed briefs with the court already.
One of the lawyers for the bankrupt operating unit, David Zott, told the Chicago judge on Friday that he believed Rakoff was ready to rule Tuesday. “I think there is a substantial chance of that, I honestly do,” Zott said, “because I don’t think he would set something for 4 p. m.
on all those motions [otherwise]. ” Caesars on Monday is expected to file an emergency appeal with the federal court to stay the suit, which it has said could force the entire company into bankruptcy..