It has been a tough year for the gambling industry. Many of the largest casinos in New Jersey,and others across the country, have been struggling to keep their doors open. With many people having less discretionary income, it has been increasingly difficult for many casinos to stay in operation due to the lack of revenue. It was recently announced that Caesars Entertainment Corp. is planning to file for Chapter 11 bankruptcy protection in order to stay in business.
Caesars, known for being the leader in the gambling industry, has been dealing with debt since 2008 and has accumulated an industry-high of $22.8 billion. The company triggered a default when it was not able to make its $225 million bond interest payment. Things became worse when the company's stock began to drop the day before the restructuring announcement was made.
An executive for Caesars stated that going through the restructuring process will be in the best interest of the stakeholders and will provide them with the maximum value. Caesars reportedly will be splitting into two separate entities -- one will be a real estate investment trust and the other will be for company operations. During the bankruptcy process, it was also stated that the company will continue to operate as normal and continue on with all of its customer appreciation programs. Through the restructuring, the company is looking to lower its debt from $18.4 billion to $8.6 billion
New Jersey businesses that are struggling financially have a chance to stay in operation through the Chapter 11 bankruptcy process. As part of the restructuring, the company will focus on what processes are inefficient and find ways to streamline them to reduce costs. This will allow them to operate leaner and discover ways to reorganize their debt so that they can keep as many jobs as possible and stay in business. After emerging from the process, a business can come out on more stable financial ground and prepared for a better future.
Source: pressofatlanticcity.com, "Caesars to file for Chapter 11 bankruptcy protection", Jennifer Robison, Dec. 19, 2014