Caesars Looks to Keep Grip on Restructuring -- Week Ahead

By Katy Stech

Wednesday in Chicago, Caesars Entertainment Operating Co. will seek to keep a tight grip on its bankruptcy restructuring. The casino operator is asking judge to extend the period that its lawyers have to file a reorganization proposal before the field opens up to proposals from other groups.

Caesars is asking Judge A. Benjamin Goldgar to extend that plan filing deadline until Nov. 15. Such requests are common in bankruptcy cases, especially one as complicated as Caesars, which is trying to restructure more than $18 billion in debt.

Caesars has already filed a reorganization proposal, but independent examiner Richard Davis is now probing the company's prebankruptcy transactions with non-bankrupt parent company Caesars Entertainment Corp. His job is to conduct a wide probe into prebankruptcy transactions made between CEOC and its parent. In several lawsuits, creditors have said Caesars entities shifted good assets away from them to benefit its owners, including private-equity firm Apollo Global Management LP. At least seven transactions between 2009 and 2014 have been questioned.

Caesars has said the transactions were proper, designed to manage and improve CEOC's debt load and liquidity. Most parties want to wait until the report is finished before deciding on the current proposal, the Caesars' bankruptcy lawyers said.

"These Chapter 11 cases are also among the largest and most complex ever filed," Caesars said in earlier court papers.

Among the properties included in the bankruptcy filings are most of the Caesars Palace Las Vegas, two casinos in Atlantic City, N.J., and a dozen Harrah's or Horseshoe casinos in smaller U.S. markets such as Tunica, Miss., and Reno, Nev.

Silverware and giftware designer Reed & Barton, a 190-year-old Massachusetts company that filed for bankruptcy in February, could find new owners at an auction on Tuesday.

Reed & Barton's lawyers got at least one bid to challenge a $15 million offer-in-hand from competitor Lifetime Brands, Inc. Reed & Barton sells flatware, crystal drinkware, picture frames, Christmas ornaments and baby giftware.

The lawyers didn't identify new bidders in its notice filed to the U.S. Bankruptcy Court in Boston. Lead bidder Lifetime Brands distributes tableware and cookware including the Farberware, KitchenAid, Mikasa, Pfaltzgraff and Cuisinart lines.

The family-owned Reed & Barton has moved its manufacturing overseas, mostly to Asia. Its manufacturing facility in Taunton, Mass., factory--built with silver handrails on the staircases--was identified as contaminated in 1990 and is undergoing an expensive cleanup.

The company has also struggled to get a grip on pension liabilities of $18 million and a drop in orders. About 40% of the company's sales were made to Costco, QVC, Macy's and Bloomingdale's.

Reed & Barton says that Lifetime's offer is enough to pay off more than $6 million in lender and trade debt. Any auction-winning offer will still need approval from Judge Henry J. Boroff.

On Wednesday, the Nevada-based seller of zNose machines, which can detect traces of cancer, explosives and palm tree fungus, could get the permission it needs from a judge to get out of bankruptcy protection.

Electronic Sensor Technology Inc. said that its bankruptcy-exit plan will give the company a fresh financial start to pursuing new ways to use its zNose machines, which they said can pick up on soft-tissue carcinomas that indicate lung cancer and breast cancer. The plan needs approval from Judge Peter Carroll of the U.S. Bankruptcy Court in Santa Barbara, Calif.

In court papers, Electronic Sensor lawyers said that only one creditor voted against the plan, which promises to pay creditors 15% of what they are owed or alternately, will give them an ownership stake in the company.

Electronic Sensor filed for Chapter 11 protection on Oct. 23 before it could finish switching to focus on the health-care industry, saying it needed a $1.9 million bankruptcy loan to survive. The zNose machine's sales have been flat during the last three years after falling 70% from a sales peak of $2.2 million in 2008, according to court papers.

Formed in 1995, Electronic Sensor hasn't made money yet on the sale of chemical-vapor detection instruments, which can pick up on compounds in concentrations so small that they are measured in parts per trillion. Under the company's reorganization plan, its current ownership, which is divided among about 45 investors, would be canceled.

--Patrick Fitzgerald and Joseph Checkler contributed to this article.

Write to Katy Stech at [e-mail]

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