Judge A. Benjamin Goldgar of the U.S. Bankruptcy Court for the Northern District of Illinois in Chicago on April 29 is scheduled to preside over a hearing on the matter.
In a filing earlier this week, the official Committee of Unsecured Creditors said the Las Vegas gaming company should consent to an involuntary petition filed in Delaware. "To carry out its statutory duties to its estate, CEOC must consent to the involuntary petition and thereby preserve the estate's ability to avoid the lien it granted against cash less than 90 days before the filing of the involuntary petition," the motion said. "If it does not, CEOC's estate loses approximately $200 [million to] $500 million in cash that is otherwise available for the benefit of unsecured claimholders."
The committee emphasized the debtor has a "fiduciary duty to maximize value for all creditors."
The motion continued: "CEOC recognizes the likely reason the involuntary petitioners filed the involuntary petition is 'to preserve potential preference claims related to liens on certain cash that CEOC perfected in mid-October.' Incredibly, CEOC never explains why its statutory duties to preserve such preference claims for the benefit of its estate should be ignored, although, CEOC is clearly acting under the control of its shareholders who get released and receive favorable settlements of their affiliates' avoidance action liabilities" if a Chapter 11 plan based on a restructuring support agreement is confirmed.