On January 15, 2015 Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York issued an Opinion and Order upholding all of the claims in the complaint filed by Gardy & Notis, LLP:
I find that the Complaint's plausible allegations that the August 2014 Transaction stripped plaintiffs of the valuable CEC Guarantees leaving them with an empty right to assert a payment default from an insolvent issuer are sufficient to state a claim under section 316(b)…[A]s alleged in the Complaint, removal of the Guarantees through the August 2014 Transaction is an impermissible out-of-court debt restructuring achieved through collective action.This is exactly what TIA section 316(b) is designed to prevent.
Judge Scheindlin also declined to stay the case against CEC notwithstanding the bankruptcy filing of CEOC.
The case is Frederick Barton Danner v. Caesars Entertainment Corp. et al., No. 14cv07973-SAS, in the United States District Court for the Southern District of New York.