Casino company Caesars Entertainment Corp was sued for more than $6 billion by a representative for noteholders who are the lone creditors backing its plan to overhaul $18 billion in debt, Reuters is reporting.
The lawsuit, filed in Manhattan federal court on Monday, seeks damages equal to the outstanding principal and interest on at least $6.3 billion in first-lien notes issued by Caesars' operating unit, which filed for bankruptcy in January, according to Reuters.
According to the wire service, the lawsuit was brought by UMB Bank, which is the indenture trustee for several issuances of first-lien notes, and not by actual noteholders, which include the Elliott Management investment fund.
UMB said Caesars breached terms of the notes and the U.S. Trust Indenture Act by voiding a guarantee of the operating unit's obligations.
Caesars is already defending several lawsuits accusing it of improperly benefiting from the transfer of the best casinos out of its operating unit over the past several years, leaving the unit unable to pay its debts, the wire service reports.