In bankruptcy, the house always pays.
Caesars Entertainment Operating Co., one of America’s biggest gaming companies, will pay more than $160 million to a half-dozen Am Law 100 firms for their services during its nearly three-year stay in Chapter 11 that ended in October.
The final bills, made available in a summary court filing Tuesday, still require approval from U.S. Bankruptcy Judge Benjamin Goldgar of the Northern District of Illinois. The payments to outside firms have slowed within the past year as the bankruptcy drew to a close, as previously noted by The American Lawyer.
The biggest winner in the bankruptcy that shed roughly $10 billion in Caesars’ corporate debt is Kirkland & Ellis, which billed for $76.9 million in fees in its role as lead counsel to the company. The firm’s work was led by James Sprayregen and David Seligman and included former partner Paul Basta, who recently picked up his first role as co-chair of the bankruptcy practice at Paul, Weiss, Rifkind, Wharton & Garrison.
Winston & Strawn, which last year wrapped up its work as legal counsel for examiner Richard Davis, billed a total of $30.6 million. Davis, a former Weil, Gotshal & Manges partner and member of the Watergate Special Prosecution, was investigating whether the parent company of Caesars stripped the operating company of profitable assets before it filed for bankruptcy.
That report said Caesars could be liable for up to $5 billion in damages for the reshuffling, although a deal was struck to avoid litigation on that front. Proskauer Rose billed $28.7 million in legal fees representing a committee of unsecured creditors. Jones Day billed another $25.1 million for its work on behalf of a group of second-lien junior bondholders.
Paul Hastings and DLA Piper also played roles in the Chapter 11 case. Paul Hastings billed about $284,000 for its work as special conflicts counsel to Caesars. And DLA Piper billed roughly $180,000 for its work in 2015 as special conflicts counsel to the debtor.
The bankruptcy by Caesars was the result of debt piled onto the gaming company by a $31 billion leveraged buyout by Apollo Global Management LP and TPG Capital LP of what was then Harrah’s Entertainment. The deal, announced in December 2006, closed in January 2008.
In the end, those owners gave up most of their stake in Caesars, which was valued at $950 million. Creditors of Caesars owned about 70 percent of the company as it emerged from bankruptcy under a plan agreed upon in September.