Casino lawsuit could add $2.8 billion to Harrah's debt

The buyers of Harrah's Entertainment Inc. could be getting the casinos with an extra price tag.

Casino lawsuit could add $2.8 billion to Harrah's debt A lawsuit started in 2000 by the Mohawk Tribe could add another $2.8 billion to the $13.9 billion debt that Harrah's buyers Apollo Management and Texas Pacific Group agreed to take on as part of the deal currently in the works. The price of Harrah's Entertainment Inc. (NYSE:HET) agreed upon by the gambling company and the private equity joint venture was set at $17.1 billion, including the $13.9 billion in debt. But a lawsuit initiated back in 2000 could add another $2.8 billion to the bottom line.

The St. Regis Mohawk Tribe of New York state sued Park Place Entertainment over a deal the two parties signed for a joint development of a casino in the Catskills in upstate New York, about hour and a half away from New Jersey. But the tribe claimed that the deal was only a tool to keep tribal competition away from the four Atlantic City casinos of Park Place's successor company, Harrah's Entertainment Inc. The tribe was awarded by a tribal court $1.8 billion and later - an extra $1 billion in interest. The case is pending at a federal court, where the tribe is trying to enforce the judgment and Harrah's is claiming that the tribal court is not legitimate. Harrah's Entertainment Inc. stock price was down 0.39% or $0.35 at 10:40 am EST.

Published on 10/29/2007