Section 105(a) of the Bankruptcy Code provides that a bankruptcy court “may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” 11 U.S.C. § 105(a). In the Caesars bankruptcy, the Seventh Circuit explored the breadth of a court’s rights to take action under this section. The Seventh Circuit held that section 105(a) permits the Bankruptcy Court to issue an injunction with respect to litigation pending against the debtors’ non-debtor parent. The Court of Appeals did not ultimately determine whether the stay should in fact be granted because “that’s an issue for the bankruptcy judge to resolve in the first instance;” rather, it held that the Bankruptcy Court and District Court had erred in interpreting section 105(a) too narrowly in denying the stay sought by the debtors. In re Caesars Entm’t Operating Co., Inc., No. 15-3259, 2015 WL 9311432 (7th Cir. Dec. 23, 2015).
Caesars Entertainment Corporation
What Happens in Delaware Does Not Always Stay in Delaware: Caesars Victorious in Venue Battle
On Wednesday, January 28th, the Bankruptcy Court for the District of Delaware transferred venue for the involuntary bankruptcy of Caesars Entertainment Operating Company to Chicago, frustrating attempts by certain second lien noteholders to administer the $18.4 billion case in Delaware. The junior noteholders had filed an involuntary petition in Delaware against CEOC, three days before CEOC and 172 of its affiliates filed voluntary bankruptcy cases in the Bankruptcy Court in Chicago. As a result of the transfer of venue of the CEOC case, Judge Benjamin Goldgar of the Northern District of Illinois Bankruptcy Court will preside over all of the cases, including determining the validity of the involuntary case. In re Caesars Entertainment Operating Company, Inc., No. 15-10047 (KG), 10-11 (Bankr. D. Del. Feb. 2, 2015).