One of the biggest casinos around Caesar’s Palace has recently filed for Chapter 11 bankruptcy. It is owned by the Caesar Entertainment Operating Company. All other properties will be still operating, and user accounts will not change, this includes all of their online casinos in the USA, as well as all poker rooms. This move is a voluntary action of the company so that they can tackle their $23 billion dollar debt.
The Caesar Entertainment Operating Company views this move as a viable business strategy, one that has worked for many in the past. Gary Loveman, CEO said all operations will run as usual as they work on reorganizing the company. He stated guests will continue to receive rewards through the Total Rewards loyalty program. “Staff will continue to provide excellent customer service which is our trademark,” comments Loveman. “This company will be made into two companies a casino operator and property trust company.”
Caesars employs about 68,000 people in different casinos and resorts in the United States alone. It generates over 85.6 billion in 2013. Chapter 11 Bankruptcy gives companies time to restructure and try to restore financial viability on their own. Two problems cited with the company was they did not upgrade and expand US markets and failed to take advantage of the casino boom in Asia.
Caesars’ Entertainment Corporation chairman Gary Loveman will step down on June 30. He will be replaced by the former chairman and CEO of Hertz Global Holdings. Loveman said that with the restructuring of the company now is the time for transition and change. He said his decision to be chairman was based on the confidence that they had made the right decision to help the company overcome its financial problems. He hopes to work with everyone to achieve a seamless transition.
Loveman is one of the highest-paid casino executives during recent times. His agreement was extended until 2016. He will remain as the company’s chairman until then. He will slowly transition into this role as the company’s chairman beginning after July 1, His replacement is Mark Fissora former head of Hertz Rental Cars. Bloomberg reported that investors had wanted Fissora removed from Hertz due to multiple accounting and operational mistakes.
Mark Fissora will be earning 1.8 million and a possible bonus when he takes over. He will work with Loveman over the next four years who will remain as Chairman. There are mixed reaction to his taking over. Kim Knowland the director of high yield research at Gimme Credit said although Fissora has experience in public and private companies his departure from Hertz raises questions. The decision to make the change was not really a surprise to her.
Most executives wished both men well and will work with them both of them to make the transition smooth and successful. Overall reducing the company’s large debt and making it financially profitable is the main goal of the recent changes.