United States Bankruptcy Appellate Panel of the Ninth Circuit
In re: CAESARS ENTERTAINMENT OPERATING COMPANY, INC., Debtor.
DESERT PALACE, INC.; PARIS LAS VEGAS OPERATING COMPANY, LLC; PHWLV, LLC; BOARDWALK REGENCY CORPORATION, DBA Caesars Atlantic City; ROWEN SEIBEL; LLTQ ENTERPRISES, LLC; LLTQ ENTERPRISES 16, LLC; FERG, LLC; FERG 16, LLC; TPOV ENTERPRISES, LLC; TPOV ENTERPRISES 16, LLC; DNT ACQUISITION, LLC; GR BURGR, LLC; J. JEFFREY FREDERICK, Appellees. MOTI PARTNERS, LLC; MOTI PARTNERS 16, LLC, Appellants, LLTQ ENTERPRISES 16, LLC; LLTQ ENTERPRISES, LLC; FERG, LLC; FERG 16, LLC, Appellants,
DESERT PALACE, INC.; PARIS LAS VEGAS OPERATING COMPANY, LLC; PHWLV, LLC; BOARDWALK REGENCY CORPORATION, DBA Caesars Atlantic City; ROWEN SEIBEL; MOTI PARTNERS, LLC; MOTI PARTNERS 16, LLC; TPOV ENTERPRISES, LLC; TPOV ENTERPRISES 16, LLC; DNT ACQUISITION, LLC; GR BURGR, LLC; J. JEFFREY FREDERICK, Appellees.
and Submitted on July 27, 2018 at Las Vegas, Nevada
from the United States Bankruptcy Court for the District of
Nevada Honorable Laurel E. Babero, Bankruptcy Judge,
Q. Rugg of Barack Ferrazzano Kirschbaum & Nagelberg LLP
argued for Appellants;
Jeffrey Zeiger of Kirkland & Ellis LLP argued for
Before: LAFFERTY, BRAND, and TAYLOR, Bankruptcy Judges.
LAFFERTY, BANKRUPTCY JUDGE
challenge the bankruptcy court's orders: (1) remanding
certain removed claims to Nevada state court based on lack of
subject matter jurisdiction; and (2) denying as moot
Appellants' motions to transfer venue to the Bankruptcy
Court for the Northern District of Illinois.
28 U.S.C. § 1447(d) prohibits review of remand orders
that are based on a lack of subject matter jurisdiction, we
DISMISS these related appeals.
Caesars-Seibel Restaurant Agreements
Entertainment Operating Company ("Caesars") and its
various affiliates operate multiple casinos in numerous
states. Between 2009 and 2014, Caesars affiliates Desert
Palace, Inc. ("Desert Palace") and Boardwalk
Regency Corporation d/b/a Caesars Atlantic City
("Boardwalk") entered into agreements with entities
affiliated with Rowen Seibel (the "Seibel
Agreements") to design, develop, construct, and operate
restaurants in Caesars' casinos in Las Vegas, Nevada, and
Atlantic City, New Jersey.
in 2009, Desert Palace contracted with Seibel affiliate MOTI
Partners, LLC ("MOTI") to design, develop,
construct, and operate the Serendipity restaurant at
Caesar's Palace in Las Vegas, Nevada. In 2012, Desert
Palace contracted with Seibel affiliate LLTQ Enterprises, LLC
("LLTQ") to design, develop, construct, and operate
a restaurant branded under the name of celebrity chef Gordon
Ramsay at Caesar's Palace in Las Vegas. In 2014,
Boardwalk contracted with Seibel affiliate FERG, LLC
("FERG") to design, develop, construct, and operate
a second Ramsay-branded restaurant at Caesars Atlantic City
in New Jersey.
the Seibel Agreements included representations, warranties,
and conditions to ensure that Caesars and its affiliates (the
"Caesars Affiliates") were not entering into
business relationships that would jeopardize their good
standing with gaming regulators. To ensure that the Caesars
Affiliates were not doing business with an "Unsuitable
Person," as defined in the agreements, the Seibel
Agreements required Mr. Seibel to provide at the outset of
the business relationships "Business Information
Forms," in which Mr. Seibel represented that he had not
been a party to a felony in the last ten years and that there
was nothing that would prevent him from being licensed by a
gaming authority. The Seibel Agreements also required Mr.
Seibel and his entities to update those disclosures if they
became inaccurate; they never provided an update. Unbeknownst
to the Caesars Affiliates, when the parties entered into the
Seibel Agreements, Mr. Seibel was engaged in criminal conduct
that rendered him "Unsuitable" as defined by the
Seibel Agreements. Specifically, beginning in 2004 Mr. Seibel
was using foreign bank accounts to defraud the IRS. In April
2016, Mr. Seibel was charged with and pleaded guilty to one
count of a corrupt endeavor to obstruct and impede the due
administration of Internal Revenue Laws. In August 2016 Mr.
Seibel was sentenced to federal prison, home confinement, and
community service. Mr. Seibel never informed the Caesars
Affiliates of any of his criminal activities or his
conviction, which the Caesars Affiliates discovered from
August 2016 press reports. The Caesars Affiliates terminated
the Seibel Agreements on September 2, 2016.
and numerous affiliates including Desert Palace and Boardwalk
each filed chapter 11 bankruptcy petitions in the Bankruptcy
Court for the Northern District of Illinois in January 2015.
The cases were ordered jointly administered, with Caesars
designated as the lead case.
2015, Caesars moved to reject the LLTQ and FERG agreements
related to the operation of the Ramsay-branded restaurants.
In January 2016, Caesars moved to reject the MOTI agreement
related to the operation of the Serendipity restaurant. LLTQ
and FERG filed a request for payment of administrative
expenses in November 2015. MOTI and MOTI Partners 16, LLC
(the "MOTI Entities") filed a request for payment
of administrative expenses in November 2016. The motions to
reject and requests for payment of administrative
expenses-which involve the impact of Mr. Seibel's
criminal activity on the parties' rights and liabilities
under the Seibel Agreements-remain pending before the
Illinois bankruptcy court.
plan of reorganization was confirmed on January 17, 2017, and
the plan's ...