Fontainebleau Las Vegas Files For Bankruptcy

Casino-resort developer Fontainebleau Las Vegas LLC reported last Tuesday that it had filed for bankruptcy after failing to obtain $800 million from lenders in construction funding, wrote Business Week. That was just part of what was needed to finish the $2.9 billion property.

Last April, Fontainebleau Las Vegas filed a $3 billion lawsuit against Bank of America, JPMorgan Chase Bank, Deutsche Bank Trust Company Americas and eight other lenders. The suit claimed that these lenders did not come through on their contract to provide the $800 million. However the lenders contradicted this statement. Shirley Norton, spokeswoman for Bank of America told the Associated Press that the bank was discussing "restructured financing" with the company.

Last month the lawsuit was changed, charging Deutsche Bank with purposely interfering with contracts because of its ownership of a rival resort expected to open in 2010.

"It is unfortunate that our lenders forced us to take this step. By reneging on the revolving credit facility, they effectively shut down the project and put thousands of people out of work," said Howard Karawan, chief restructuring officer of Fontainebleau Las Vegas. "Our goal now is to secure funding to complete this world-class project and restructure our existing debt."