Caesars, CEOC reach settlement tied to compensation plan obligations

By Caroline Salls

Pittsburgh, Sept. 19 – Caesars Entertainment Corp. entered into a settlement with Caesars Entertainment Operating Co., Inc. (CEOC) related to the liabilities and assets associated with five nonqualified deferred compensation plans, according to an 8-K filed Monday with the Securities and Exchange Commission.

The plans covered by the agreement include the Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan (ESSP), the Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II (ESSP II), the Park Place Entertainment Corp. Executive Deferred Compensation Plan (CEDCP), the Harrah’s Entertainment, Inc. Deferred Compensation Plan (DCP) and the Harrah’s Entertainment, Inc. Executive Deferred Compensation Plan (EDCP).

As of June 30, Caesars said it had recorded $42 million in plan liabilities, representing the estimate of its obligations under the ESSP and ESSP II and for some former directors and employees who had employment agreements with predecessor Harrah’s Entertainment, Inc. and participated in the EDCP.

Caesars said the additional liability related to the CEDCP and DCP that it had not recorded as of June 30 was roughly $30 million. The company said it determined that this portion of the liability was attributable to CEOC.

Also as of June 30, Caesars had recorded about $64 million of assets held under a trust agreement to fund obligations under the deferred compensation plans, but had not recorded about $55 million of assets held under an escrow agreement also related to plan obligations.

Under the agreement, upon the effectiveness of CEOC’s plan of reorganization in its pending bankruptcy case, Caesars will assume all obligations to plan participants under or in connection with all five deferred compensation plans, and CEOC and the other debtors in the bankruptcy case will have no further obligations to the plan participants.

At that time, CEOC and the other debtors will relinquish and release any claim or right that any of them may have to the assets held under either the trust agreement or the escrow agreement.

Upon the effectiveness of the restructuring, Caesars said it will record the additional assets and liabilities related to the CEDCP and DCP and escrow agreement.

The settlement is subject to approval of the U.S. Bankruptcy Court for the Northern District of Illinois.

Caesars is a Las Vegas-based casino-entertainment company that filed for bankruptcy on Jan. 15, 2015. The Chapter 11 case number is 15-01145.

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