Caesars may sink because of alleged $3B typo

Leon Black’s Apollo Global Management is now defending itself against an alleged typo that could cost up to $3 billion.

Apollo’s Caesars Entertainment is fighting bondholders in a $750 million New York case that could sink the business — and is hinging on a big “and/or.”

Caesars in its 2008 debt agreement set conditions that would need to be met so it could strip the guarantee between the parent company and the gaming-operating subsidiary.

In the debt agreement, it says it can strip the gaming subsidiary’s guarantees if: A) it stopped being a subsidiary of the parent, B) the company transferred substantially all of its assets out of subsidiary, “AND” C) it essentially prepaid the bonds.

“There’s no way they satisfied all three conditions,” a source close to the case said, referring to when Caesars stripped the guarantee transferring some of its best assets to newly created divisions and put the subsidiary in bankruptcy.

Caesars claims it meant to say “OR.”

“It is only upon a finding of outright absurdity [that the word ‘AND’ would never apply in the context] that the court may as a matter of interpretation carry out the intention of a contract,” the junior creditors bringing suit said Friday in their final brief.

Apollo partner David Sambur counters, “I believe that plaintiffs’ construction would lead to commercially unreasonable outcomes.”

The judge will likely rule on the alleged typo matter this month, a source said.

Caesars has said if it loses the suit, the entire company might have to declare bankruptcy. Apollo did not return calls.