Caesars Palace Execs Owed Millions They May Never See

Posted on: April 6, 2015, 03:37h.

Last updated on: January 12, 2023, 11:17h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Caesars executives bankruptcy deferred payments — Gary Loveman is one of many Caesars Executives who could lose most of their deferred salaries in bankruptcy proceedings. (Image: Jonathan Alcorn/Bloomberg)

Caesars Entertainment Corp. has been embroiled in plenty of public battles over their restructuring and bankruptcy machinations.

Some debt-holders have made it public knowledge that they’re unhappy with how assets were handled, and now that the Caesars Entertainment Operating Co. is in Chapter 11 reorganization, creditors are hoping to collect as much money as possible.

But there’s another group who could lose out big because of the bankruptcy: Caesars’ own executives.

According to reports, 279 current and former Caesars executives and directors are owed at least $78.6 million because of a deferred compensation program, a program that is now being classified as unsecured debt in the bankruptcy proceedings.

And with nearly 15,000 entities looking to collect any money left over after secured debts are covered, it seems unlikely at best that these executives will ever see their money.

Loveman, Satre Among Those Owed Funds

Perhaps the best known of these executives is Chairman Gary Loveman. According to court filings, he’s owed $71,427: no small change to be sure, but perhaps inconsequential for a man who has reportedly received over $18 million in compensation in some years.

Through 2012, Forbes had estimated his compensation over the previous five years at over $28 million in total.

Others, however, have amounts tied up that even a CEO would be concerned with. One employee, known only as “Participant 001” in court documents, is said to be owed $11.7 milion in deferred compensation.

Another potentially big loser is former Harrah’s Entertainment Chairman and CEO Phil Satre, who is owed nearly $6.7 million.

The deferred compensation plans allowed employees to put aside funds from salaries, bonuses and other compensation into a retirement plan. The funds would not be taxed until they were drawn upon.

According to a report by the Las Vegas Review-Journal, some executives decided to take lump sum payments when they left the company, perhaps fearful that those funds could be endangered if and when the company entered into bankruptcy proceedings.

“I just got a little cautious about these types of programs,” said Tony Santos, a former executive at Caesars. Santos is now the CEO of Gateway Casinos, a Canadian firm.

Dozens More Lost Retirement Payments Due to Bankruptcy

While some may have little sympathy for high-level executives, the problems with retirement benefits run much deeper at Caesars. Earlier this year, 63 former employees saw their retirement payments halted by Caesars after the company went into bankruptcy. Those 63 individuals are owed close to $33 million in retirement pay.

They only learned that their payments were stopped when, in January, they received a letter explaining that the retirement fund had been included as unsecured debt in the bankruptcy instead of the monthly checks they had been expecting.

“It was devastating,” said former Caesars Palace host Kenneth Houng. “You can’t do this to people my age.”

Loveman and other company officials have said they are sympathetic to the plight of those who have lost their retirement funds.

“We’re meeting with counsel and meeting with people who are participants in this plan to see if there are any creative ways or solutions to try and help,” Loveman said.

But even if Caesars wanted to make good on their retirement payments, they may not be able to do so. According to attorneys, bankruptcy law does not allow supplemental retirement plans to be treated differently than other forms of unsecured debt.

There’s still a chance that the plans could be protected if they are found to be under the control of the Caesars Entertainment parent company; if they are not, unsecured creditors are expected to receive only about 10 cents on the dollar for what they are owed.

Last Comments ( 3 )

Write a comment

Write a comment Cancel reply

Armand Fux April 7, 2015

I worked for 27 years in Bally's Atlantic City and all the different companies during my tenure where good companies including Caesars til Harrahs took over. From then on all went down hill they had no clue about running a business. They where very bad to employees let a lot of people go and but more burdens on the rest. They constantly pressured the people til the either quit or got fired. Harrahs was the worst company i ever worked for. Caesars was a very good company that had experience in gaming they went bankrupt because Harrahs under Loveman put a lot of assets from Caesars and put them into Harrahs. I quit my Job about 8 month after Harrahs took over.Nothing but Crooks.
Steve Knutson April 7, 2015

Mr. Loveman seems to have driven "Caesars Entertainment Operating Company" into bankruptcy and as he says: “We need to do a good job explaining to the commission which assets are a part of the bankruptcy,” Loveman said. “It has nothing to do with the Linq or High Roller. We’re very happy with the High Roller. It’s been a good investment with a strong financial return.” It does seem that Loveman's "good job of explaining" quote goes along with the talk he gave at Berkley where he said "you have to tell the truth - almost all the time" (YouTube video of Sept 2013) In the beginning of the video he does a very good job of explaining exactly he should have never become part of Harrah's Entertainment to begin with. Will he explain how some the the operating and profitable assets are in one Caesars company yet another Caesars company is full of assets that are not part of the bankruptcy? smells like a deliberate attempt at fraud to me. As a former employee, it seems that my own suspicions of what Mr. Loveman might do with Harrah's Entertainment have come to pass. Fortunately my own 401k wasn't involved in what looks more like fraud than bankruptcy. Loveman- go back to teaching, just not ethics.
Diana Purcell April 6, 2015

you couldn't pay me enough money to go back to Caesars properties after I was it packed and stabbed by an illegal that they knew and knowingly let live on the properties behind Louisiana downs in Bossier City Louisiana they are rejecting any kind of payment for my medical and say that they are not responsible when indeed they supposedly have security patrolling their parking lot at all times well you know there was no security patrolling the parking lot had there been I would have been attacked it would have been less likely I would have been stabbed for 3 minutes receive 73 stitches and permanent scars on my chest area and my hands permanent disabilities due to negligence at Harrah's Caesars properties Louisiana downs in Bossier City Louisiana so hopefully all you people that work for them will leave and maybe they'll have to shut down because they don't treat their customers right and apparently they're not treating their creditors or their employees properly either they make plenty of money from everybody that visit their properties and just because I have over built in over built an extended their credit is not our problem is there's and by the way they're still building on a horseshoe here and also Louisiana downs so how is that how do they keep building when they're filing bankruptcy and saying they're losing millions and they can't even pay my medical.