Caesars Entertainment Operating Co. asked a judge to disband a committee of creditors that was set up to represent the interests of investors hostile to the bankrupt gambling company’s restructuring plans, Bloomberg News reported yesterday. The panel of second-lien noteholders is dominated by hedge funds that sued the Las Vegas-based gambling company before it filed for bankruptcy last month and accuse it of scheming to defraud creditors. They have also sued the non-bankrupt parent, Caesars Entertainment Corp. Caesars asked the judge overseeing its bankruptcy to either disband the committee, combine it with a related committee of unsecured creditors or limit how much the second-priority group can spend on legal fees. Because the two committees, organized by the U.S. Justice Department’s bankruptcy watchdog, have official status with the court, Caesars must pay their expenses, which in large cases can run into the tens of millions of dollars.
