By Tracy Rucinski
CHICAGO (Reuters) - A judge has rejected an unusual attempt by junior bondholders of Caesars Entertainment's bankrupt operating unit to disqualify law firm Kirkland & Ellis from leading the casino group's $18 billion Chapter 11 restructuring.
Jones Day, the junior bondholders' law firm, had asked the court to reconsider a May order that allowed the bankrupt unit of Caesars Entertainment Corp (O:CZR) to hire Kirkland, led by a lawyer known in the industry as the "godfather of restructuring," James Sprayregen.
The fresh motion in the contentious bankruptcy case accused Sprayregen of giving misleading court testimony earlier this year regarding pre-bankruptcy work Kirkland handled for Caesars. Jones said it unearthed new evidence including minutes from a 2014 board meeting.
Jones Day's heavily redacted filing did not disclose the meeting minutes.
Allegations of misleading a court about potential conflicts have led to law firms being forced to disgorge fees and even criminal convictions. Kirkland & Ellis has billed $21 million for the case through May, according to court filings.
In his denial to consider the motion at a Nov. 18 hearing, U.S. Bankruptcy Judge Benjamin Goldgar of Illinois said Jones Day should have requested court permission before filing such a restricted document.
He said they could ask to refile the motion.
Jones Day is led by Bruce Bennett, who squared off against Sprayregen in the landmark Detroit municipal bankruptcy case.
Kirkland has overseen some of the biggest corporate bankruptcy cases in recent years, including Energy Future Holdings and United Airlines UAL Corp.
No one from Kirkland or Jones Day could immediately be reached for comment.