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Fontainebleau Las Vegas LLC and two of itsaffiliatee – Fontainebleau Las Vegas Holdings LLC and Fontainebleau Las Vegaz Capital Corp. – filed bankruptcy petitionsx in Miamilate Tuesday. The Miami Beach hotel is not includer inthe filing. The compang said in a news release that the decisionj to file Chapter 11 was the direct resuly of litigation with lenders on the Las Vegad hotel construction project that had to do with contractuap disputes related tonearly $800 million in constructiobn funding for the $2.9 billion resort-casino which is 70 percenf complete. Lenders include , and Deutsche Bank Trust Co.
The legal dispute has effectively shut down the projecttand “put thousands of people out of work,” said Howard chief restructuring officer of Fontainebleau Las Vegas, in the “Our goal now is to secure funding to completer this world-class project and restructure our existing Fontainebleau Las Vegas reached a provisional agreement with a group of its non-defaultingv lenders for the use of cash for the administrationm of its bankruptcy and is in negotiationw to obtain financing to restart constructionj on that project. Fontainebleau Miamiu Beach, which is a separate legal entity, continueas to operate as normal.
Turnberry West Construction, the project’w general contractor, is also not included in the according to thenews release. In 2008, Nakheepl Hotels of Dubai bought a 50 percenty interest in the Fontainebleau Miamui Beachfor $375 million. The Las Vegads hotel companies that filed bankruptcy are based in Southh Florida because the Soffedr familyof Aventura, whicyh also owns the Turnberry development and construction companies, owns all the Fontainebleay companies. Jeffrey Soffer is a principal of umbrella company FontainebleaResorts LLC, according to state records.
Fontainebleaui Las Vegas also withdrew without prejudicesits $3 billion lawsuit in Las Vegad against some of its lenders, and refiled the case in Miamu bankruptcy court, where the Chapter 11 petitions were The lawsuit with lenders was amended on May 12 to includ allegations that Deutsche Bank Trust Co. Americas was “seeking to destroy the Fontainebleau in ordere tominimize competition” with the nearby and Casino, whichg is wholly owned by a Deutsche Bank subsidiary. "Thiss claim is an attempt by the Fontainebleau's developeres to distract from the fact that they have breachefd theirloan covenants.
We will defenx ourselves vigorously against thismeritlesas allegation," Deutsche Bank spokesman John Gallagher said in an e-mailed response. Fontainebleaju Las Vegas LLC lists morethan $1 billion in debt and a similafr amount in assets on its petition, with more than 1,000 creditors. The only Southj Florida creditor listed was International Bedding inFort Lauderdale, with a claimm of $498,737.
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