‘Too late to halt lawsuits against Caesars’: bankruptcy Judge Goldgar says

U.S. bankruptcy judge Benjamin Goldgar, who was overseeing Caesars Entertainment’s operating unit’s bankruptcy stated that it would be difficult to halt bondholder lawsuits against the company in New York and Delaware given that proceedings had already begun.

Several hedge funds were suing the parent casino company for a total of $11.4bn, as it reneged on guarantees on bonds issued by its operating unit, which filed for bankruptcy in January 2015.

Parentco Caesars was planning to pump about $4bn into its operating unit to help restructure it.

Legal action against the parent could jeopardize the funding and force it into bankruptcy as well, the unit argued in seeking an injunction to stop the lawsuits.

Caesars has the right to terminate its funding agreement by 22 June 2016 if the judge does not halt the lawsuits by 15 June 2016, the unit’s lawyers said at the hearing.

The operating company of Caesars has spent about $1.1bn on interest payments on its first lien debt and administrative expenses. Further, if the parentco files for bankruptcy, it may incur additional expenses of $200m in restructuring costs.

Separately, according to an independent examiner’s report in March 2016, Caesars and its private equity sponsors Apollo Global and TPG Capital could face $5bn in damages from the operating unit’s bankruptcy. Junior bondholders are claiming $12.6bn as part of the bankruptcy.

Source: Reuters

Five banks sued in the U.S. for rigging $9tn agency bond market

A private lawsuit was filed in a Manhattan court accusing five major banks and four traders of conspiring to rig prices worldwide in a more than $9tn market for bonds issued by government-linked organizations and agencies.

The accused banks comprise of Bank of America Corp, Credit Agricole SA, Credit Suisse Group AG, Deutsche Bank AG and Nomura Holdings Inc.

It was claimed that were accused of secretly agreeing to widen the “bid-ask” spreads they quoted customers of supranational, sub-sovereign and agency (SSA) bonds.

The lawsuit was filed by the Boston Retirement System, which said the collusion dates back to 2005, and caused investors to overpay for bonds they bought or accept low prices for bonds they sold.

The proposed class-action lawsuit seeks triple damages, and follows probes by U.S. and European Union antitrust regulators into possible SSA bond price rigging.

Those probes are also examining the London-based defendant traders Hiren Gudka of Bank of America, Bhardeep Singh Heer of Nomura, Amandeep Singh Manku of Credit Agricole and Shailen Pau of Credit Suisse.

Source: Reuters

Norwegian fund to sue Volkswagen over emissions scandal

Norway’s $850bn sovereign oil fund Norges Bank Investment Management, was expected, in the coming weeks, to file a class-action lawsuit against Volkswagen in German courts.

Volkswagen had admitted last year that it had used sophisticated secret software in its cars to cheat exhaust emissions tests.

Norway’s wealth fund said that Volkswagen’s actions had contributed to a loss of NOK 4.9bn in the fund’s portfolio during the second quarter of 2015.

Previously, Volkswagen reached a nearly $10 billion deal with the U.S. government in April 2016, to buy back or fix about a half million of its diesel cars and set up environmental and consumer compensation funds.

Norway’s wealth fund had also recently demanded that U.S. oil companies, such as Exxon Mobil and Chevron, should do more to report on the risks of climate change.

The fund, itself built from Norway’s oil and gas wealth, had also made similar demands of oil firms worldwide.

Source: Reuters