Casino operator Caesars Entertainment Corp (CEC) was dealt a blow on Thursday as a federal judge ruled that creditor lawsuits against the company could proceed while CEC’s main unit is in bankruptcy proceedings.

The day started on a positive note, as CEC announced it had filed an amended restructuring plan designed to rescue its bankrupt main unit, Caesars Entertainment Operating Co (CEOC). But that narrative was spoiled when US District Court Judge Robert Gettleman upheld an earlier ruling that said lawsuits brought against CEC by junior creditors in New York and Delaware courts could proceed – a fate CEC had desperately hoped to avoid.

If you’re just joining us, CEC put CEOC into Chapter 11 protection in January and floated a restructuring plan that would cut CEOC’s $18.4b debt by more than half, with junior creditors bearing most of the loss. Prior to that filing, those junior creditors had filed a series of lawsuits arguing that CEC had “looted” CEOC by shifting all the profitable assets out of CEOC into other divisions, leaving the junior creditors holding a debt-saddled shell.

CEC had argued that these lawsuits should be put on hold so that CEOC’s bankruptcy could proceed. CEC also warned that if the lawsuits were to proceed and the junior creditors prevailed, CEC would also be forced to file for bankruptcy. In August, the judge handling the New York lawsuit – who has previously characterized CEC’s asset-shifting as “an impermissible out of court restructuring” – ordered the warring parties to prepare for trial.