ColonelAngus
Diamond Member
- Feb 25, 2015
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Didn't Hillary ask yesterday, "HOW CAN YOU LOSE MONEY IN CASINOS?"
Perhaps she should ask the purveyors of the Caesar Entertainment Casinos.....THEY FILED FOR BANKRUPTCY.
What pieces of shit, right?
Apollo, TPG reach deal with Caesars creditors that hurts investors | New York Post
For 20 months, private equity moguls Leon Black and David Bonderman battled like a pair of ferocious lions.
Black’s Apollo Global Management and Bonderman’s TPG Capital, owners of the bankrupt Caesars Entertainment unit, fought against creditors’ demands for more cash and for a stake in the casino’s non-bankrupt units.
The fight was worth waging, as it would have put the PE giants and their funds’ investors in line for a decent return on their investments.
Since buying whatwas then called Harrah’s in 2008, both Apollo and TPG collected hefty fees — about $333 million total, records show. But investors, thanks to the tough-as-nails battle waged by Apollo and TPG, stood to gain, as well.
But last month, Black and Bonderman turned from lions into pussycats.
After more than a year of standing firm, Apollo and TPG caved to creditors’ demands and forked over more cash as part of Caesars’ Chapter 11 reorganization plan — and gave bondholders an equity stake in the casino’s non-bankrupt unit.
The move means investors in the PE giants’ funds will see their return on investment slashed — to about 27 cents on the dollar for some.
While the reasons for Black’s and Bonderman’s change of heart may be open for debate, the timing is sure to raise some eyebrows. It came days before Sept. 29, when Apollo’s Marc Rowan, Bonderman and other executives of the funds would have been forced to turn over personal financial records to creditors.
While the decision to give in to their creditors’ demands means their funds’ investors are likely to come out losers in the casino venture, Black, Bonderman and their PE firms remain winners.
Apollo and TPG invested a total of $80 million in Caesars, meaning the roughly $333 million in fees they collected gave them better than a four-to-one return.
Meanwhile, fund investors, including New York, New York City, and California pensions, invested $3.4 billion in the failed Caesars purchase that will now dwindle in value to about $918 million, including fees, The Post has learned.
Apollo and TPG plan to combine the bankrupt and non-bankrupt Caesars units post-Chapter 11 and investors will be left with a 10 percent stake, sources said.
“How messed up is it that they buy a company, drive it into the ground and make [mulitiple] times their money, while their investors get 27 cents on the dollar?” the investment head of a large public pension that invests with Apollo told The Post.
“This shows everything that is wrong with their private equity model.”
Apollo, in its most recent report to investors, said their Caesars’ stake was worth 40 cents on the dollar, the investor said.
The fact the Apollo-led company worked very hard to maximize the investment until the partners had to reveal financials and then abandoned investors could risk being seen as a violation of their fiduciary responsibility, the investor added.
But don’t expect any investor to sue. In the clubby world of PE investing, an investor who sues could forfeit access to future buyout investment opportunities.
Apollo and TPG declined to comment.
Perhaps she should ask the purveyors of the Caesar Entertainment Casinos.....THEY FILED FOR BANKRUPTCY.
What pieces of shit, right?
Apollo, TPG reach deal with Caesars creditors that hurts investors | New York Post
For 20 months, private equity moguls Leon Black and David Bonderman battled like a pair of ferocious lions.
Black’s Apollo Global Management and Bonderman’s TPG Capital, owners of the bankrupt Caesars Entertainment unit, fought against creditors’ demands for more cash and for a stake in the casino’s non-bankrupt units.
The fight was worth waging, as it would have put the PE giants and their funds’ investors in line for a decent return on their investments.
Since buying whatwas then called Harrah’s in 2008, both Apollo and TPG collected hefty fees — about $333 million total, records show. But investors, thanks to the tough-as-nails battle waged by Apollo and TPG, stood to gain, as well.
But last month, Black and Bonderman turned from lions into pussycats.
After more than a year of standing firm, Apollo and TPG caved to creditors’ demands and forked over more cash as part of Caesars’ Chapter 11 reorganization plan — and gave bondholders an equity stake in the casino’s non-bankrupt unit.
The move means investors in the PE giants’ funds will see their return on investment slashed — to about 27 cents on the dollar for some.
While the reasons for Black’s and Bonderman’s change of heart may be open for debate, the timing is sure to raise some eyebrows. It came days before Sept. 29, when Apollo’s Marc Rowan, Bonderman and other executives of the funds would have been forced to turn over personal financial records to creditors.
While the decision to give in to their creditors’ demands means their funds’ investors are likely to come out losers in the casino venture, Black, Bonderman and their PE firms remain winners.
Apollo and TPG invested a total of $80 million in Caesars, meaning the roughly $333 million in fees they collected gave them better than a four-to-one return.
Meanwhile, fund investors, including New York, New York City, and California pensions, invested $3.4 billion in the failed Caesars purchase that will now dwindle in value to about $918 million, including fees, The Post has learned.
Apollo and TPG plan to combine the bankrupt and non-bankrupt Caesars units post-Chapter 11 and investors will be left with a 10 percent stake, sources said.
“How messed up is it that they buy a company, drive it into the ground and make [mulitiple] times their money, while their investors get 27 cents on the dollar?” the investment head of a large public pension that invests with Apollo told The Post.
“This shows everything that is wrong with their private equity model.”
Apollo, in its most recent report to investors, said their Caesars’ stake was worth 40 cents on the dollar, the investor said.
The fact the Apollo-led company worked very hard to maximize the investment until the partners had to reveal financials and then abandoned investors could risk being seen as a violation of their fiduciary responsibility, the investor added.
But don’t expect any investor to sue. In the clubby world of PE investing, an investor who sues could forfeit access to future buyout investment opportunities.
Apollo and TPG declined to comment.
