Casino operator Caesars Entertainment Corp (CEC) may see its restructuring plans undone after a group representing first-lien creditors filed a $6.34b lawsuit against the company.
On Monday, UMB Bank filed a complaint in Manhattan federal court, accusing CEC of having “shifted their focus from enhancing enterprise value to protecting their equity investment at all costs.”
UMB is the indenture trustee for $6.34b of first-lien notes issued by CEC’s troubled main unit Caesars Entertainment Operating Co. (CEOC). UMB filed a notice of default against Ceasars last November on behalf of creditors holding $1.25b in senior notes.
CEOC filed for bankruptcy in January, citing over $18b in debt. The company has floated a restructuring plan that would see CEOC split into two units – one to manage its casinos, another to own the property on which those casinos stand. The investors who hold the $6.34b in notes overseen by UMB Bank – including Elliott Management Investment Fund – had originally signaled their support for the restructuring plan.