Bankruptcy RoundUp: European Auto, US Gaming

Netherlands-based sports car maker Spyker declared bankruptcy on December 18 after failing to secure a bridge loan to help the one-time owner of Saab refinance and restructure its organization. The firm started the process to enter into the Dutch equivalent of Chapter 11 earlier in the month. The company plans to resurrect the group and focus on electric vehicles, according to news reports. Earlier this year, a US District Court dismissed Spyker’s $3 billion lawsuit against General Motors, in which it alleged GM sabotaged a Saab deal between Spyker and Chinese investors. The judge held that GM, which sold the Swedish automaker to Spyker, had the right to oppose the sale based on their sales agreement.

In other bankruptcy news, Caesars Entertainment Operating Co. (CEOC), the largest subsidiary of Caesars Entertainment Corporation, expects to file for Chapter 11 in mid-January. Caesars Entertainment, Caesars Entertainment Resort Properties and Caesars Growth Partners, which are separate entities with independent debt capital structures, will not be affected. CEOC announced on December 19 that it and Caesars Entertainment reached an agreement with CEOC's first lien note holder steering committee regarding the terms of a comprehensive financial restructuring plan that will substantially reduce debt and lower interest payments.

CEOC’s proposed restructuring plan would eliminate about $10 billion of its debt ($18.4 billion). Annual interest expense would fall by about 75%, to approximately $450 million. The filing will affect 44 casinos and resorts, all but five in the United States, under the Caesars, Harrah’s and Horseshoe brands. Under the terms of the proposed financial restructuring, CEOC will separate its US-based gaming operating assets and real property assets into two companies, including an operating entity and newly formed, publicly traded real estate investment trust that will directly or indirectly own a newly formed property company.

- Diana Mota, NACM associate editor

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