Hilton Worldwide Inc. is suing Caesars Entertainment
Corp., alleging the gaming company owes at least $17.7 million to a pension
fund for former Hilton employees.
The lawsuit involves a pension deal created when Hilton
spun off its gaming assets in 1998, forming Park Place Entertainment.
Park Place, renamed Caesars Entertainment Group in 2011,
agreed to contribute to the Hilton retirement plan for the employees
transferred to the new entity and retired employees, according to Hilton's
suit, which was filed Dec. 24 in the U.S. District Court for the Eastern
District of Virginia.
Hilton, which administers the fund, says Caesars'
proportional share of contributions to the fund are roughly 31 percent. The
McLean hotel giant's lawsuit says Caesars has declined its repeated requests to
pay its share.
Hilton (NYSE: HLT) names both Las Vegas-based Caesars
Entertainment Corp. (NASDAQ: CZR) and its subsidiary, Caesars Entertainment
Operating Co. Inc., in the suit.
Caesars spokesman Gary Thompson said the company does not
comment on pending legislation. A call to the attorney listed for Hilton in the
suit, Gary Alan Coad of Weil, Gotshal & Manges LLP, was not immediately
returned.
Caesars has been plagued with financial troubles during
the past few months, saying last week that it had reached a deal to restructure
some of its debt. The operating company subsidiary plans to file for Chapter 11
next month, according to The New York Times.
In addition to the $17.7 million, Hilton's lawsuit says
Caesars owes about 31 percent of $26 million Hilton paid to the fund in 2013 to
cover a judgment from a 1998 class-action lawsuit. That judgment determined
that the plan's funding obligations were about $100 million higher than had
been previously estimated.
Source: Washington
Business Journal
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