Wilmington Trust, a representative for noteholders of Caesars Entertainment Corp.’s (CEC) bankrupt unit, has sued the casino operator for avoiding its written guarantee on repayment of more than $51 million of interest on the unit's debt, Reuters reported today. The lawsuit alleges that Caesars has not paid interest on 10.75 percent notes due 2016 issued by its unit Caesars Entertainment Operating Co. (CEOC), which filed for bankruptcy in January. The lawsuit filed by White & Case LLP today alleges that Caesars violated the U.S. Trust Indenture Act by voiding its guarantee of the operating unit's obligations. Wilmington Trust, which alleged that notes of about $479 million plus interest remain outstanding, said CEC had guaranteed payment of all principal and interest on the notes as and when due.
