Image source: Caesars Entertainment.

What: Shares of gaming giant Caesars Entertainment Corp (NASDAQ:CZR) jumped as much as 13.6% Tuesday after announcing a couple of positive news items. At 2:50 p.m. EDT shares were up 10.5%.

So what: The most consequential item is the $4.4 billion sale of Playtika, a mobile game business, to a Chinese consortium led by Shanghai Giant Network Technology. The Playtika stake is held within Caesars Acquisition Company (NASDAQ: CACQ), which is at the center of bondholders' claims in Caesars Entertainment Operating Company's (CEOC) contentious bankruptcy. 

Speaking of bankruptcy, Caesars Entertainment said it has reached a deal with 37% of second lien noteholders to restructure CEOC. They would get at least $0.46 on the dollar that they're owed, but the deal needs 50.1% of noteholders to go into effect. And that may be tough with large hedge funds like Appaloosa Management holding out for more, potentially dragging Caesars Entertainment into bankruptcy. 

Now what: The sale of Playtika could make the CEOC bankruptcy even more contentious because it shows the incredible amount of value Caesars Entertainment Corp transferred away from CEOC debtors when CEOC and Caesars Acquisition Company was formed. And I have doubts that second lien debt holders will agree to the proposed deal. Stay tuned for how this battle plays out because at the end of the day the court could decide if Caesars Entertainment will end up in bankruptcy and the rulings haven't gone well for the company so far.

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