LAS VEGAS—Caesars Entertainment's plan to put its main operating unit into voluntary bankruptcy and restructure it as a REIT is meeting stiff resistance from both junior and senior creditors. A group led by Appaloosa Investment LP filed in US Bankruptcy Court in Delaware Monday to block the CRZ plan, while a group of first-lien lenders said Monday they would oppose recent amendments to the plan unless the terms were changed.

Bloomberg reported Monday evening that the group—identified in a statement only as an “informal committee of certain beneficial holders” that control more than 50% of the first-lien bank debt of Caesars Entertainment Operating Co., CRZ's main operating unit—included Fortress Investment Group and the Blackstone Group's GSO Capital Partners. The group, which is being advised by Stroock & Stroock & Lavan LLP and Rothschild Inc., said it had agreed not to support or approve of the Dec. 31, 2014 amended and restated restructuring support and forbearance agreement unless it was approved by a supermajority of their group.

The junior creditors, which also include funds affiliated with Oaktree Capital and Tennenbaum Capital, seek to force CEOC into bankruptcy ahead of the planned Jan. 15 filing date. The group asked the court to name an examiner to investigate their claim that the parent company had “plundered” CEOC while moving its assets out of the reach of second-lien debt holders.

“These insider transactions stripped the debtor of most of its valuable income-generating assets and hundreds of millions of dollars of cash, leaving the debtor burdened with massive debt that cannot be repaid,” according to court documents. CRZ calls the allegations “baseless” and “a transparent attempt to thwart a restructuring that has been agreed to by more than two-thirds of CEOC's first-lien noteholders.”

Ironically, Bloomberg reports, the involuntary Chapter 11 filing for CEOC by the Appaloosa group may work in CRZ's favor. Quoting Bruce Grohsgal, a retired attorney who's now a visiting professor of bankruptcy law at Widener University School of Law, Bloomberg reported that the involuntary petition means that CRZ doesn't face immediate limitations on selling or transferring assets, as it might otherwise under the US Bankruptcy Code. Nor does CRZ need a bankruptcy judge's permission to make other major decisions, Bloomberg reported. “In one sense, it's debtor heaven,” Grohsgal told Bloomberg.