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Caesars Entertainment Corp. scored a victory yesterday in its bid to dig out from under $18.4 billion in debt through the bankruptcy of its main operating unit, when a judge in Delaware said its financial restructuring could proceed in Chicago, Dow Jones Newswires reported yesterday. Bankruptcy Judge Kevin Gross steered the action toward a court where Caesars could have an easier time shaking off accusations it looted the big casino operation before putting it into chapter 11 protection. Judge Gross handed a setback to unhappy creditors, junior bondholders and bank lenders who had allied to keep the chapter 11 proceeding active in Delaware, instead of Chicago, the company's choice for an attempted soft landing for its debt-laden largest unit. In directing the chapter 11 case to proceed in Chicago, Judge Gross said that his overriding consideration was that Caesars was entitled to "just enough deference" for its choice, despite "suspect" conduct by the company in the period before its bankruptcy filing.

The casino operating unit of Caesars Entertainment Corp. should be allowed to choose where to file for bankruptcy even if it misbehaved, the company's lawyers argued yesterday as its chapter 11 case unfolded in two courts, Reuters reported yesterday. Creditors of Caesars' operating unit want a U.S. Bankruptcy judge to move its chapter 11 case from Chicago to Delaware, where the creditors have tried to push the company into bankruptcy. The creditors hope a Delaware court will be less favorable to the company's strategy for getting its debt-cutting plan approved. Yesterday’s hearing was adjourned in the afternoon as a major winter storm loomed. Closing arguments will be held today at 10 a.m. by telephone. The hearing will decide where the bankruptcy will proceed, and by extension which legal standard to apply to Caesars' $10 billion debt-cutting plan — the one in Chicago or the one in Delaware.