An extra-marital affair of a restructuring adviser working for the bankrupt unit of Caesars Entertainment Corp. has cost the casino operator a team of key advisers just as the unit faces a Monday deadline to submit a plan to end its $18 billion bankruptcy.

The bankrupt operating unit hired financial adviser Melissa Knoll and her team in 2014 to help probe creditor allegations that its parent, Caesars, stripped away its best hotels and left behind a mountain of debt. Caesars has denied these allegations.

In a little-noticed ruling from the bench in Chicago on March 16, a judge said that Knoll's team's work was "tainted" by an affair that she had with a lawyer for parent company Caesars, the target of her investigation.

"She was sleeping with the enemy," Judge Benjamin Goldgar said on March 16. Goldgar, who is overseeing the bankruptcy, said he could never be sure Knoll had not shared information with the lawyer for Caesars, and as a result he said them investigation by the bankrupt unit would have little value.

"Because the investigation is tainted in this way, there isn't any point in pursuing it," the judge said.

In a statement issued by her attorney, Knoll said that her work and that of her team on the bankruptcy case "was beyond reproach, competent, complete and unbiased."

The lawyer for Caesars, Vincent Lazar, did not respond to requests for comment. His law firm, Jenner & Block, declined to comment.

The judge's decision to discard Knoll's investigation comes at a critical time in the 15-month bankruptcy. The operating unit is seeking confirmation by Sept. 15 of a revised bankruptcy plan, which it said in court papers it would present by April 4.

"It complicates an already complex case when the meter is running very, very fast," said Douglas Baird, a professor at the University of Chicago Law School.

Earlier this month, an independent court examiner appointed by Goldgar concluded that the operating unit had up to $5.1 billion in potential claims against its parent and others.

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