After repeatedly denying rumors regarding its financial straits, several media outlets are reporting that Caesars Entertainment will file for Chapter 11 bankruptcy protection by the middle of January.

According to iGaming Business, the proposed bankruptcy proceedings will reduce the debt of Caesars Entertainment to only $8.6 billion versus the $18.4 billion it currently owes.

One of the most vocal opponents of bankruptcy, Chairman Gary Loveman, stated to iGaming Business, “The planned restructuring of Caesars will allow us to establish a strong and sustainable capital structure… and maximize value for our stakeholders. I want to thank this creditor group for its support of the restructuring.” The bankruptcy proceedings will allow Caesars to reduce its annual interest by about 75%, down to $450 million per year versus the $1.7 billion it is currently paying.

All is not gloom in the headquarters of Caesars, however. Only the main operating unit of Caesars Entertainment –Caesars Entertainment Operating Company– will be impacted by the bankruptcy proceedings. According to Reuters, other units such as Caesars Entertainment, the resort properties, and Caesars Growth Partners will not be under the bankruptcy umbrella. This leads many to believe that certain aspects that affect poker players – WSOP.com and the World Series of Poker – will not be a part of the proceedings either.

Caesars Entertainment owns over 50 hotels and casinos across the United States, including the Rio All-Suite Hotel and Casino, Harrah’s, and Planet Hollywood in Las Vegas; Bally’s, Harrah’s, and Caesars in Atlantic City; and new properties such as Horseshoe Baltimore in Maryland and two new casinos in the Ohio area.

After the bankruptcy proceedings are closed, Caesars will split into two entities, according to Reuters. There will be an operations entity and a publicly traded real estate investment trust that will open a new property company. The proposed deal has been signed off on by all parties and should take effect next month.

The impetus of these new proceedings was spurred by events from last week. As reported here at PocketFives, Caesars Entertainment defaulted on a $225 million bond interest payment last week, putting the company in default on its massive debt. Spokesmen stated at that time that there were discussions to restructure the debt of the company through a bond sale or other means.

Loveman vehemently shot down any rumors of an impending Caesars bankruptcy at that time. In an interview with Howard Stutz of the Las Vegas Review-Journal, Loveman said that the conditions Caesars was facing “are better and not worse than they have been before.”

In response to several analysts who made statements such as Caesars debt being “unsustainable” and being “uncomfortable” with Caesars’ leverage, Loveman fired out, “These same people have been predicting the bankruptcy of the company since 2009. So far, they have been unsuccessful in having that prediction made accurate.”

The stock of Caesars Entertainment has been suffering of late despite the bullish market currently in action in New York. After trading as high as $26.47 per share on March 4, the stock has slid as the year has progressed. At the close of business on Tuesday, Caesars Entertainment was trading at $15.24 per share.

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