The Caesars Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Power and Greed of Wall Street

by Sujeet Indap, Max Frumes

Overview

It was the most brutal corporate restructuring in Wall Street history. The 2015 bankruptcy brawl for the storied casino giant, Caesars Entertainment, pitted brilliant and ruthless private equity legends against the world's most relentless hedge fund wizards.

In the tradition of Barbarians at the Gate and The Big Short comes the riveting, multi-dimensional poker game between private equity firms and distressed debt hedge funds that played out from the Vegas Strip to Manhattan boardrooms to Chicago courthouses and even, for a moment, the halls of the United States Congress. On one side: Apollo Global Management and TPG Capital. On the other: the likes of Elliott Management, Oaktree Capital, and Appaloosa Management.

The Caesars bankruptcy put a twist on the old-fashioned casino heist. Through a $27 billion leveraged buyout and a dizzying string of financial engineering transactions, Apollo and TPG—in the midst of the post-Great Recession slump—had seemingly snatched every prime asset of the company from creditors, with the notable exception of Caesars Palace. But Caesars’ hedge fund lenders and bondholders had scooped up the company’s paper for nickels and dimes. And with their own armies of lawyers and bankers, they were ready to do everything necessary to take back what they believed was theirs—if they could just stop their own infighting.

These modern financiers now dominate the scene in Corporate America as their fight-to-the-death mentality continues to shock workers, politicians, and broader society—and even each other.

In The Caesars Palace Coup, financial journalists Max Frumes and Sujeet Indap illuminate the brutal tactics of distressed debt mavens—vultures, as they are condemned—in the sale and purchase of even the biggest companies in the world with billions of dollars hanging in the balance.

Product Details

ISBN-13:	9781635766769
Publisher:	Diversion Books
Publication date:	03/16/2021
Sold by:	Barnes & Noble
Format:	eBook
Sales rank:	413,592
File size:	3 MB

About the Author

Sujeet Indap is the U.S. editor of the Lex Column at the Financial Times, where he contributes stories across the paper. He has written extensively on the intersection of corporate finance and corporate law. Indap was previously an investment banker before he joined the Financial Times in 2013. He is a graduate of Pomona College and the Wharton School at the Universityof Pennsylvania. Indap lives in Manhattan, NY, with his wife.

Max Frumes leads a news team at Fitch Solutions covering corporate debt and restructuring. He previously was the founding editor of a leading publication covering corporate bankruptcy, and before that reported for S&P’s Leveraged Commentary & Data and The Deal. Frumes received his undergraduate degree from the Universityof California, Berkeley, and an MSJ from Northwestern’s Medill School of Journalism. He lives in Brooklyn with his wife and daughter.

Table of Contents

List of Select Key Characters v

Caesars Structure vii

Prologue 1

Part I 9

1 A Numbers Game 11

2 Kings of Leon 17

3 Waking up in Vegas 25

4 Put Your Money Where Your Mouth Is 33

5 A Bridge Just Far Enough 41

Part II 45

6 Project Runway 47

7 Not That Innocent 63

8 CERP's Up 77

9 Four Properties of the Apocalypse -85

10 Shot of B-7 91

11 Pixie Dust 101

12 Shell Game 107

13 Chasing Waterfalls 111

14 Guitar Hero 131

15 First Derivative 139

16 Rubicon Crossed 143

Part III 147

17 Big Game Hunter 149

18 Involuntary Reaction 153

19 Pride Goeth Before the Fall 157

20 Split Screen 165

21 Storm Juno is Gone 173

22 A Thorough Examination 179

23 Next Man Up 187

24 Give Peace a Chance 191

25 The Meter is Running 199

26 Don't Stop "Till" You Get Enough 203

27 Mr. Rowan Goes to Washington 213

Part IV 221

28 Roll of the Dice 223

29 The Ides of March 227

30 Old Friends 243

31 The Hole and the Gap 255

32 End Game 269

33 'Pony Up the Paper' 275

34 Know When to Fold'em 287

35 Veni, Vidi, VICL 291

36 The Hangover 299

Epilogue 303

Acknowledgments 313

Notes and Sources 315

Index 334

About the Authors 344

Editorial Reviews

04/12/2021

Lawyers and bankers duke it out in this thorough if dry history of the downfall of the Caesars Entertainment empire. Built in Las Vegas by Jay Sarno in 1966, Caesars Palace soon became the most famous casino in the world. By 2015, Caesars was in debt and filed for bankruptcy, which led to a frenzy to work out who should be at the helm: the private equity firms that had acquired the chain in 2008, or the hedge fund "vultures" who owned the company's debt. For years, leveraged buyouts ensured the company's "twists and turns...riveted Wall Street," until finally, in 2019, Caesars announced its planned sale to Eldorado Resorts. While the survey is populated with colorful characters—attorney and former Washington insider Jim Millstein, competitive and ambitious COO Gary Loveman—the casino empire's implosion takes place largely in courtrooms and boardrooms, and such scenes become repetitive. Corporate combat, meanwhile, is waged largely via paperwork, leaving this Vegas story with little glitz or flash. Business students will find it a welcome respite from stodgier case studies, but general readers may find it slow going. Agent: Hilary Claggett, the Rudy Agency. (Mar.)

Publishers Weekly

Praise for The Caesars Palace Coup

"The strength of [The Caesars Palace Coup] is its vivid, behind-the-scenes footage of the insiders who now dominate the largest corporate bankruptcy cases, vignettes that will enliven many a law or business-school class in the next decade."
—Wall Street Journal

“The Caesars Palace Coup recounts in exquisite detail the extraordinary lengths that Marc Rowan and David Sambur, his Apollo partner, went to stave off the inevitable bankruptcy filing of Caesars in 2015, and the extraordinary lengths they went to during the two-year bankruptcy process to try to salvage their investment.”
—Vanity Fair

“An investigative deep-dive into an old-fashioned casino heist, which includes a $31 billion leveraged buyout and a string of financial engineering transactions by Apollo Global Management and TPG Capital—all in the midst of the post–Great Recession slump, pitting private equity firms and distressed-debt hedge funds against each other in an ultimate poker match.”
—Fortune

“A casino caper and legal thriller rolled into one…. An eccentric Illinois judge, whose final ruling ultimately stunned bankruptcy aficionados, and the rantings from the Masters of the Universe make the book entertaining, maybe essential, reading across Wall Street…. The Caesars Palace Coup helps make clear what such Wall Street clashes are really about: men with big egos swinging their lacrosse sticks.” 

—Reuters Breakingviews

“Lawyers and bankers duke it out in this thorough if dry history of the downfall of the Caesars Entertainment empire…. a welcome respite from stodgier case studies.”
—Publishers Weekly

“The Caesars Palace Coup is a superb inside account of what modern high finance is actually like—the strategies, the personalities, the relationships, the stress, and the shouting. Fascinating, suspenseful, and comprehensive, it is the Barbarians at the Gate of distressed debt.”
—Matt Levine, Money Stuff columnist, Bloomberg Opinion

“No story better captures early 21st century Wall Street like the bankruptcy of Caesars Entertainment. The Caesars Palace Coup is a well-researched, engaging modern-day corporate thriller, filled with epic courtroom and boardroom battles and the kinds of colorful characters that only exist on the buy-side. This is the fascinating inside story of a clash of the titans—the who’s who of distressed hedge funds battling each other and private equity giants Apollo and TPG for their piece of the Las Vegas casino conglomerate. . . . [A] must read for anyone who loves the deals and the drama that so often characterize the ins and outs of Wall Street and corporate restructuring.”
—Kristin Mugford, Harvard Business School

“In The Caesars Palace Coup, two of Wall Street’s most plugged-in journalists take us deep inside corporate raiding, 21st century style. Exploiting distressed debt instead of undervalued stock, buccaneer hedge funds and other vulture investors pay seventy, sixty, sometimes less than fifty cents on the dollar to scoop up controlling stakes in troubled companies. This breathtaking narrative culminates in bitter financial and courtroom warfare as Apollo Global Management, its allies, and its high-powered lawyers and lobbyists maneuver relentlessly against equally savvy investors to freeze them out of the resulting rise in profits and force them to accept a ‘cramdown’ settlement of their stakes in the company.”
—Paul Steiger, former Wall Street Journal managing editor and founding editor of ProPublica

“The distressed debt markets are the most rough-and-tumble corner of Wall Street, and Indap and Frumes have written the best book yet on the machinations, power moves, and personalities of the investors who make fortunes rolling the distressed debt dice.”
—Jared A. Ellias, Bion M. Gregory Chair in Business Law, the Universityof California, Hastings

"There is so much to like in this book. Its primary strength is its Law & Order backstory, peeling back the onion of every major player...Four years of painstaking personal interviews have paid off handsomely in this fascinating account of the inner workings of big money and big law reorganization practice."
—Jason Kilborn, Credit Slips

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