Why did Fontainebleau Las Vegas LLCs file for Chapter 11 Bankruptcy?”
MIAMI (AP) – Casino-resort developer Fontainebleau Las Vegas LLC said Tuesday it has filed for Chapter 11 bankruptcy protection after failing to get certain lenders to provide about $800 million in construction funding to complete the company’s $2.9 billion property on the Las Vegas Strip. Fontainebleau Las Vegas had filed a $3 billion lawsuit in April against Bank of America, JPMorgan Chase Bank, Deutsche Bank Trust Company Americas and eight other lenders in an effort to access the prearranged financing to pay its 3,000 construction workers and finish the project, which is 70 percent complete and had eyed an October opening. The complaint alleged that the lenders terminated their agreement to provide an $800 million revolver loan due to one or more unspecified “events of default” by Fontainebleau. But the developers said they didn’t default on any part of their agreement. Bank of America spokeswoman Shirley Norton told The Associated Press in April that the bank was discussing “restr
http://online.wsj.com/article/SB124460975477101279.html June 10, 2009 Fontainebleau Las Vegas Enters Chapter 11 By TAMARA AUDI Fontainebleau Las Vegas, a $3 billion resort project on the Las Vegas Strip, filed for bankruptcy-court protection late Tuesday, the project’s owners said. The filing comes after a protracted battle with a group of lenders who pulled out of an $800 million loan needed to finish building the hotel and casino resort — one of the most lavish planned for Las Vegas. Fontainebleau is suing the lenders. But its owners said they were still pursuing alternate financing to finish the project. Nearly all construction has stopped on the project. The permanent shutdown of Fontainebleau would be another major blow to Las Vegas, which has seen many big projects delayed or abandoned as financing has dried up. Around 3,000 construction workers were employed on the Fontainebleau site. The proje
The Fontainebleau Las Vegas said in a news release that the decision to file Chapter 11 was the direct result of litigation with lenders on the Las Vegas hotel construction project that had to do with contractual disputes related to nearly $800 million in construction funding for the $2.9 billion resort-casino project, which is 70 percent complete. Lenders include Bank of America, JPMorgan Chase Bank and Deutsche Bank Trust Co. Americas. The legal dispute has effectively shut down the project and “put thousands of people out of work,” said Howard Karawan, chief restructuring officer of Fontainebleau Las Vegas, in the release. “Our goal now is to secure funding to complete this world-class project and restructure our existing debt.” Fontainebleau Las Vegas reached a provisional agreement with a group of its non-defaulting lenders for the use of cash for the administration of its bankruptcy case, and is in negotiations to obtain financing to restart construction on that project.
