Caesars Palace in Las Vegas. Photo: Caesars Entertainment.

Caesars Entertainment's (CZR) announcement of its corporate restructuring and the bankruptcy of its largest division is a complex addition to the company's already complex history. Caesars was once a top-performing company in the gaming industry, but poor operations in recent years produced liquidity problems that led to its current financial mess.

Yes, Caesars has had a tumultuous and confusing backstory. And yes, the major restructuring and bankruptcy is a formidable challenge for the company. But despite these problems, this is not the end for Caesars. Caesars is still a massive industry force, and this story might just make it one of the greatest turnaround tales on the Las Vegas strip.

The complicated backstory
Caesars had a long history of ownership and sell-offs involving Hilton and other hotel companies before being acquired by Harrah's in 2005. Harrah's was then purchased and taken private by another company. Caesars was sold to Apollo Global Management in 2008 and then relisted on the Nasdaq as its own publicly trading company, with Caesars' Entertainment Operating Co. (CEOC) as a large division within CZR and Caesars Acquisition Co. (NASDAQ: CACQ) as its own entity.

This brings us to the last seven years, which includes the 2008 recession pretty much wiping out Caesars' domestic income, crushing debt expenses, failed attempts at international expansion, and finally the recent restructuring and bankruptcy.

Amid these major changes, here are three things investors should know about the company's ability to rise once again.

1) Caesars lite -- now with half the debt
After years of struggle, and an especially bad 2013 and first-quarter 2014, Caesars was obviously in financial trouble. The company started to restructure by passing huge sums of its debt to CEOC -- clearly a move to eliminate debt off the parent company's books quickly. Now, Caesars is trying to completely erase that debt by allowing CEOC to file for bankruptcy. And to get some much-needed cash flow into the parent company and streamline its operations, Caesers is buying Caesars Acquisition Co. 

The plan will shed about $10 billion in debt from Caesars' balance sheet -- a little more than half of the company's total debt load -- bringing its crushing annual debt interest payments of about $1.7 billion to just $450 million. 

2) Caesars is still an industry behemoth
Caesars remains the largest gaming employer in the world, with nearly 70,000 employees globally and more than 50 properties. Even amid its recent financial issues, Caesars continues to expand: Last year, it completed The LINQ and The Cromwell hotels on the Las Vegas Strip. 

Caesars is second only to MGM Resorts in the number of rooms it offers in Las Vegas. Its 22,000 rooms there are about five times as many as Wynn Resorts offers, so while Caesars lags the market in income, it is still one of the largest in terms of physical properties and assets.

There is a chance that some of these properties will be sold to raise more cash, but this option is uncertain; management's statements suggest the company is planning to continue operations at nearly all of these properties through and after the restructuring. If Caesars can turn things around after this restructuring and operate more profitably, its large number of assets could help the company restart and grow quickly. 


Source: Las Vegas Convention and Visitors Authority for total number of rooms in Las Vegas, and each company's website for their own hotel room numbers.

3) New leadership is coming soon
The company recently announced that longtime CEO Gary Loveman will step down, though he will remain chairman. Former Hertz CEO Mark Frissora will replace him as CEO of Caesars Entertainment. The transition is already under way, to be completed in July. As Loveman stated in a press release on the CEO change: 

After 12 years as CEO, Caesars has accomplished more than what we could have imagined when I arrived in 1998.  Now, with the company in the midst of a formal restructuring of one of its subsidiaries and a merger between entities, the time is ripe for a transition. 

True, Caesars accomplished much in the last 12 years, such as the Harrahs/Caesars acquisition itself, as well as the acquisition of Planet Hollywood and the World Series of Poker.  But the company has lost its way recently, which added to unfortunate market circumstances, and has led to the company's current mess. 

However, creating opportunities for highly leveraged companies to improve their financial health and start growing again seems to be a specialty for Frissora. His previous tenure at Hertz is said by most to have been successful, and the stock rose by 230% during that time. One reason for this was his success with taking Hertz global, something Caesars must do to have a chance for renewed growth. 

Foolish takeaway
Caesars is in a bad way right now amid its restructuring and bankruptcy. Yet the company is still a massive force in the gaming industry, with a lot of assets, brand strength, and potential opportunity to grow internationally. Can Frissora take Caesars global like he did with Hertz and help the company thrive once again?

It's still a risky bet, and there are a significant number of issues to watch (such as the legal battle happening over the bankruptcy). However, gaming investors should follow this tale, not only for the potential opportunity to invest in Caesars at its current low price, but also because of what Caesars' size means to the rest of the industry.