Last holdout bondholder in Caesars’ unit bankruptcy agrees to deal

CHICAGO — Hedge fund Trilogy Capital Management, the last holdout bondholder of Caesars Entertainment Corp.’s bankrupt operating unit, has agreed to support the casino group’s restructuring and halt litigation, a court filing showed on Tuesday.

The agreement removes the threat of a judgment against Caesars, which was facing lawsuits by hedge funds including Trilogy over guarantees on its operating unit’s bonds.

While Trilogy’s claim was small at $9.4 million, a judgment could have blown up a crucial $5 billion restructuring deal Caesars reached last month with creditors to resolve billions of dollars of potential lawsuits.

In a filing with the U.S. district court in Chicago, Trilogy and the Caesars parties said they had reached a consensual resolution of their dispute and asked the court to strike a hearing on the matter that had been scheduled for December.

Trilogy and Caesars declined to provide details of the agreement.

The reorganization plan still needs U.S. bankruptcy court approval and a trial is scheduled for January.

While Caesars now has support from the majority of its creditors, the U.S. government’s bankruptcy watchdog said last week it was still reviewing aspects of the deal.

Caesars’ operating unit filed for bankruptcy in January 2015 with more than $18 billion of debt and amid accusations by creditors that the parent had looted its main subsidiary of its best casino and hotel assets, leaving it bankrupt.

The company is also still negotiating with the National Retirement Fund over a pension dispute but lawyers said in court last week that an agreement was close.