(Reuters) — Senior creditors of Caesars Entertainment Corp‘s (CZR.O) bankrupt operating unit are threatening to abandon a framework agreement and propose their own formal restructuring plan as soon as Monday, court documents showed.
Until now, senior lenders and bondholders have been the only creditors to back a framework agreement to slash some $10 billion of debt from Caesars’ operating unit, which filed for bankruptcy with $18 billion of debt in January 2015.
But since that deal was revised in October, they say there has been “a very substantial decline in the value of the debt and equity securities proposed to be provided” to them, according to a Chicago bankruptcy court filing late on Tuesday.
“If sufficient progress toward a consensual plan is not made (…) it may very well be that a plan proposed by the first lien bank and noteholders becomes the most efficient means to allow (the company) to emerge in a timely manner from bankruptcy,” first-lien noteholders said in the filing.
Caesars declined comment.
Caesars’ plan has faced fierce opposition from other creditor groups who accuse the company of looting its operating unit of its best assets before the bankruptcy to benefit private equity owners Apollo Global Management (APO.N) and TPG Capital Management [TPG.UL].
Those transactions are the subject of an independent examination, which is due to be published later this month.
Caesars has already said it could revise its restructuring agreement in light of the examiner’s report and has proposed mediation to help warring parties reach consensus in the contentious case.
Caesars’ shares closed flat at $6.04 on Tuesday.