CHICAGO — Billionaire investors Marc Rowan and David Bonderman are among Caesars Entertainment Corp. directors who must disclose details of their wealth to creditors of the casino holding company’s bankrupt subsidiary, a U.S. judge ruled.
Junior creditors of Caesars Entertainment Operating Co. Inc. convinced the court to force certain of the parent’s directors to provide documents to show that they each have the financial resources to contribute to CEOC’s reorganization plan, in exchange for releases from allegations of fraud.
“These folks are going to have to pony up the paper,” U.S. Bankruptcy Judge Benjamin Goldgar said Wednesday at a hearing in Chicago.
CEOC filed an $18 billion bankruptcy in January 2015.
Junior creditors accuse directors of Caesars and its private equity sponsors Apollo Global Management LLC and TPG Capital of orchestrating a plan to strip CEOC of “crown jewels” such as The Linq in Las Vegas prior to its bankruptcy.
While Caesars, Apollo and TPG have denied the allegations, a court-appointed independent examiner found in March that the three could be on the hook for up to $5 billion.
Caesars has pledged $4 billion to a CEOC reorganization plan. But junior creditors refuse to support it and argue that individual directors should also contribute if they want releases from claims.
In a motion filed on Aug. 31, the creditors demanded financial information from Caesars directors Rowan and David Sambur of Apollo, Bonderman and Kelvin Davis of TPG, former Caesars Chief Executive Gary Loveman and former Chief Financial Officer Eric Hession.
Loveman remains chairman of Caesars.
Rowan and Sambur complained in a court filing last week that the creditors were demanding “a staggering array” of evidence of their personal financial affairs, including the “receipts and instruction manuals for their children’s toys.”
Goldgar on Wednesday approved a narrower list of creditor demands. Various directors’ lawyers said they would appeal.
“We disagree with the judge’s decision, which permits an unwarranted invasion into personal privacy and is contrary to well-established law,” Marc Kasowitz, a lawyer for TPG, said in an email.
Rowan and Sambur have already offered to contribute $250 million to the CEOC reorganization, which would give creditors stock in a new group to be created through a merger between Caesars and another affiliate, Caesars Acquisition Co.