Apollo, TPG founders to give up financial information

A Chicago bankruptcy judge has approved the request from the creditors of Caesars Entertainment Operating Co to review the personal financial information of the private equity firm executives.

A US bankruptcy judge has asked Caesars Entertainment Corporation (CEC) directors, which include TPG Capital Management founder David Bonderman and Apollo Global Management co-founder Marc Rowan, to disclose details of their wealth to creditors of the casino holding company's bankrupt subsidiary.

Last week, Judge Benjamin Goldgar approved a request from Caesars Entertainment Operating Company (CEOC)’s creditors, which included information about the executives’ personal financial information. Goldar granted the request in part, altering it in an unspecified manner, according to a filing.

A group of second priority creditors argued in a 31 August motion that the directors should be required to disclose information about their personal finances. The disclosure would be used to determine whether the individuals’ ability contribute financially to the reorganisation plan in exchange for being released from potential financial liabilities relating to allegations of fraud.

Among the information the creditors sought in their motion include the individuals’ net worth, sources of income and documentation for any entity in which the individual held an interest.

The other individuals include David Sambur, a partner in Apollo’s private equity arm, Kelvin Davis, a member of TPG’s management committee, Eric Hession, CEC’s chief financial officer, and Gary Loveman, the former CEO chief executive officer.

“These folks are going to have to pony up the paper,” Judge Goldgar said at the hearing, according to news reports.

The individuals specified in court papers filed documents expressing opposition to the second priority creditors’ demands to disclose information about their personal wealth. Among other arguments asserted, the individuals said the requests pose an undue burden.

In its motion, the second priority noteholders’ wrote a “central feature” of the reorganization plan is “the release, for no contribution, of billions of dollars of meritorious claims” CEOC has against the individuals. The creditors allege the individuals “were insiders whose wrongdoing contributed directly to the looting and eventual demise” of CEOC.

CEOC filed for bankruptcy in January 2015 amid creditor accusations that parent CEC and private equity sponsors Apollo and TPG had stripped the operating arm of its best assets.

In August, the judge suggested that the firms should chip in to help restructure CEOC in its Chapter 11 case. The company’s current reorganization plan includes a $4 billion payment from CEC but not from TPG or Apollo, as previously reported by sister title Private Debt Investor.

At a 16 August meeting, former mediator and federal bankruptcy judge Joseph Farnan asked whether TPG and Apollo would “fund up to $250 million to reach a ‘best and final’ deal” for a 58 percent recovery for the debtor’s second priority noteholders. CEOC’s creditors and other parties, including CEC, were party to the negotiations.

Caesars is being represented by Kirkland & Ellis, while Jones Day leads the defence for the second priority noteholders.

Andrew Hedland contributed to this article.