Fontainebleau builder says it’s protected from paying severance

Construction superintendent claims he’s not being paid under separation agreement terms

Tuesday, July 14, 2009 | 2:05 a.m.

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Court filings shed light on Fontainebleau financing (7-2-2009)
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More subcontractors accuse Fontainebleau of failing to pay for work (6-23-2009)
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Fontainebleau subcontractors say contractor conflicted (6-19-09)
Judge orders mediation for Fontainebleau, banks (6-19-09)
Businesses file suits claiming Fontainebleau bills went unpaid (6-18-09)
Judge to expedite Fontainebleau bankruptcy case (6-17-09)
Lenders: Cost overruns led to Fontainebleau loan default (6-16-09)
Bank of America wants change in Fontainebleau bankruptcy plan (6-11-09)
Fontainebleau debt rating downgraded after bankruptcy (6-11-09)
Fontainebleau wants expedited hearing on $656 million (6-10-09)
Investment companies sue banks over Fontainebleau financing (6-10-09)
Australian company writes off Fontainebleau ownership interest (6-10-09)
Fontainebleau developer files for bankruptcy; more jobs cut (6-9-09)

Fontainebleau Las Vegas casino-resort builder Turnberry West Construction has not filed for bankruptcy protection -- but it's claiming to be protected from creditors anyway.

That's what one Turnberry executive has told a creditor, according to documents in a newly filed lawsuit.

Former Fontainebleau construction superintendent Carl Sheets sued Turnberry West in Clark County District Court last week, saying that in March it stopped making severance payments required under his separation agreement.

Court papers show Sheets was hired at a salary of $160,000 per year in March 2007 and left Turnberry West's employment in February 2009. Under the separation agreement, he was to be paid $4,394 biweekly for one year.

Fontainebleau and affiliated companies filed for Chapter 11 bankruptcy reorganization last month and that case is pending.

Turnberry West, which did not seek bankruptcy protection, has been sued by at least five subcontractors over allegedly unpaid work at Fontainebleau.

Fontainebleau has not commented on the suits against Turnberry West Construction (TWC), which is controlled by the same Miami company that is developing Fontainebleau. A request for comment was placed with Fontainebleau on Monday concerning the Sheets lawsuit.

In e-mails attached to the lawsuit, Turnberry West and Turnberry Ltd. executive Robert Ambridge told Sheets' attorney John Peter Lee that Turnberry West lacks funds to pay Sheets.

"Since it is a reorganization, not a liquidation, our attorneys expect a period of four to five months for an outcome of the overall case, which will also include a determination of TWC's ongoing role in the building process," Ambridge said in a June 15 e-mail attached to the lawsuit.

"Turnberry West Construction has not been funded by Fontainebleau since February of 2009. We have minimal funds to remain in operation. However, we have applied through Fontainebleau to its bankruptcy court for some interim allowances to remain in place with a minimal staff during the bankruptcy period," the e-mail said.

In a June 29 e-mail, Ambridge said: "TWC is an affiliate of Fontainebleau, currently in a reorganizing bankruptcy proceeding ... Any funding to and expenditure out has to be applied for and accounted for as an essential cost to maintaining the property, including a small core staff for TWC."

"Our attorneys consider TWC to have the same 'stay' defense against legal actions as Fontainebleau," wrote Ambridge, chief executive of Turnberry West Construction and senior vice president, development, at Turnberry Ltd.

"There are no available funds to pay Mr. Sheets right now. We will be glad to apply for a reinstatement of his remaining payments, on an every two-week basis, and see if the court will approve it," he wrote.

Discussion: 12 comments so far…

By bdover

7/14/09 at 6:58 a.m.

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Paying a superintendent that kind of money shows how the F had no cost controls of any kind. And severance pay for a construction worker? Without a doubt, the job was controlled by Mickey Mouse and the 7 dwarfs. Hope it never opens.
By vegas222

7/14/09 at 7:55 a.m.

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Sounds like Ben Dover must be jealous . maybe if he knew something about the circumstances he would not be grabbing his ankles in the shower so often
By unionstrong

7/14/09 at 8:44 a.m.

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Good comment vegas222! Obviously bdover has no clue what so ever and i have been saying this for awhile due to his comments about Fontainebleau. He is jealous because he has probably worked for peanuts all his life. Once Fontainebleau gets the funding it deserves we will get back in and complete this project.
By bdover

7/14/09 at 10:11 a.m.

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As I told you before, Unionweak, I worked for Bechtel in management, especially contracts, and made a bundle. Sweet retirement. Go screw some pipe, and be careful to not fall asleep on your afternoon break....
By goingbust

7/14/09 at 10:32 a.m.

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"Once Fontainebleau gets the funding it deserves we will get back in and complete this project."

There was an article a few weeks ago that basically said that this project had $2 billion spent and for $2 billion more it could be completed and then then resulting resort would be worth (... WAIT FOR IT! ...) about $1.5 billion.

Under these circumstances, it's not going to get funded. What they do with that half-completed buiding, who knows.
By bdover

7/14/09 at 1:08 p.m.

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Maybe, goingbust, they could simply finish the outside, and then turn the building into a giant union hall. They're going to need a lot of room for all the soon to be unemployed loafers.
By nightmare

7/14/09 at 1:19 p.m.

Suggest removal

There is only one industry in the US fundamentally more broken than Las Vegas casino development, and that is the American auto industry. And what do the two have in common? Unions that hijack employer to employee relationships, demand outrageous wages, drive up the cost of doing business to be unsustainable, and in the end congratulate themselves for a job well done while they point the fingers at others when their actions blow up in everyone's face.

I am not a supporter of employee exploitation. I do not believe that people should work for peanuts. I am not anti-union. I am against stupidity and excess greed, which is rampant in the FB development, and that applies to every stakeholder.

To the person that says "Once FB gets the funding it deserves...blah blah blah". Ha. FB deserves nothing other than to have the project stripped from the idiot developers. They got billions and blew it. The project is massively over budget, as in more than a BILLION dollars over budget with no financing in sight. They already got the resources they deserved. They don't deserve a bailout.

Do everyone a favor and tear down that ugly box. It is only going to create more capacity that is very unnecessary in Vegas now and for the foreseeable future. I'd even support giving the demolition job to a union.
By vegas104

7/14/09 at 5:01 p.m.

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Sell the joint to the Chinese...we can trade them for their warehouses of gold and copper they are loading up on.
By unionstrong

7/14/09 at 7:47 p.m.

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WOW! What happened to optimism people! It seems like everyone that has posted on here enjoys seeing Vegas and construction suffering in these hard economic times. Why would anybody ever consider tearing down a casino and Hotel that is 70% finished that makes alot of sense. Goingbust yeah i read the article too but if i remember right most of the comments were made by an employee of B of A and i don't believe everything i read. These banks were bailed out why not Fontainebleau. Bdover again i don't care if you worked for Bechtel they didn't build anything on the strip and just because you could not control the Union workers on your jobs don't take it out on everybody else. The bailout is coming don't be surprised when it happens.
By superintendent

7/14/09 at 7:51 p.m.

Comment removed by staff.
By superintendent

7/15/09 at 11:35 a.m.

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Not sure why my previous comment was removed but i'll try again this is the greatest industry in the best city and those who wish to bash the unions or a hotel developer like FB should take one of the many forms of transportation avalible and leave. Or maybe admit the reason their here is because of this great industry and the opportunity it provides all of us. Lets all hope for FB to finish and start another twenty year boom...
By geenab65

7/15/09 at 9:06 p.m.

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I like your words superintendent!! You have faith and I applaud you.

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