The U.S. government’s bankruptcy watchdog objected on Monday to a Caesars Entertainment subsidiary’s proposal to exit Chapter 11, threatening to derail a largely consensual plan to slash $10 billion of debt.

The Caesars subsidiary, Caesars Entertainment Operating Co (CEOC), filed an $18 billion bankruptcy in January 2015 amid allegations by creditors that its private equity-backed parent had looted the unit of its best assets and stripped debt guarantees.

Feuding parties made a peace deal in September that included a $5 billion contribution by Caesars to the unit’s reorganization plan in exchange for releases from billions of dollars in potential legal claims.

In a filing with the U.S. Bankruptcy Court in Chicago, the U.S. Trustee objected to the releases and the exculpation of “a wide array of parties for acts far beyond the plan or the Chapter 11 cases.” The U.S. Trustee called the releases “blanket immunity.”

A report by an independent examiner in March said that Caesars and its private equity backers Apollo Global Management LLC and TPG Capital Management LP could be on the hook for up to $5.1 billion in damages for the alleged asset-stripping.

Caesars, Apollo, and TPG have denied any wrongdoing.

The U.S. Trustee, which oversees the administration of bankruptcy cases, also criticized the legal releases as too broad for shielding against willful misconduct or actual fraud.

 

Caesars did not immediately reply to a request for comment on Monday.

A trial to confirm the bankruptcy is scheduled in Chicago for January.

If the U.S. Trustee disagrees with the confirmation of the bankruptcy, it could appeal to a higher court.

Apollo and TPG formed Caesars through the $30 billion leveraged buyout of Harrah’s Entertainment in 2008, just before the U.S economy tipped into recession.

Under the proposed reorganization plan, CEOC will be split into a real estate investment trust controlled by lenders and a separate operating company that will form part of a new restructured Caesars controlled by creditors.

Apollo and TPG will still own a 16% collective stake in the new restructured Caesars.