A federal bankruptcy judge in Chicago has denied a request from casino and resort operator Caesars Entertainment Corp. (NASDAQ: CZR) to delay creditor lawsuits totaling some $11 billion while the company’s operating subsidiary remains in bankruptcy. The ruling could force Caesars to join its operating company in bankruptcy.

In January Caesars merged with its property acquisition company just before the operating unit filed for Chapter 11 protection. The merger reduced Caesars debt from nearly $23 billion and gave the company some hope of weathering the storm. Private equity firms Apollo Global Management LLC (NYSE: APO) and TPG Capital maintained control of Caesars Entertainment.

The operating unit’s bankruptcy preserved the investments of Apollo, TPG, and other shareholders, but the judge may have forced the parent company into a bankruptcy filing of its own. According to The Wall Street Journal, creditors claimed that Caesars dealt with them unfairly before the operating unit’s bankruptcy filing by moving assets to other affiliates and out of creditors’ reach. The judge’s ruling has upheld the creditors’ claims.

This ruling has absolutely killed the share price, falling nearly 60% at one point. Shares traded down in the last half hour of trading on Wednesday at $5.00 in a 52-week range of $3.01 to $17.50.

Apollo Management’s stock is down nearly 4% at $21.01 in a 52-week range of $20.02 to $28.18.

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