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StumbleAustralian company writes off Fontainebleau ownership interest
Wednesday, June 10, 2009 | 9:50 a.m.
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- Fontainebleau developer files for bankruptcy; more jobs cut (6-9-2009)
- Outlook for Fontainebleau slides from bad to worse (6-8-2009)
- Fontainebleau: Bank wanted to minimize Cosmopolitan competition (5-12-2009)
- Fontainebleau glazing contractor no stranger to overcoming adversity (5-6-2009)
- Fontainebleau workers laid off amid funding concerns (4-30-2009)
- Union: Banks putting jobs in jeopardy over Fontainebleau (4-29-2009)
- Sued by Fontainebleau, banks could cite ‘act of God’ as defense for refusing funds (4-29-2009)
- In Fontainebleau's PR battle, banks have yet to talk (4-27-2009)
- Berkley wants talks with Obama administration on Fontainebleau (4-27-2009)
- Fontainebleau files $3 billion suit over funding (4-23-2009)
Sun Coverage
Australian casino resort company Crown Ltd. today said it wrote off its $250 million, 19.6 percent ownership interest in the now-bankrupt Fontainebleau resort development on the Las Vegas Strip.
"Crown also holds debt in Fontainebleau of U.S. $22 million. Crown will review the carrying value of its Fontainebleau debt at 30 June 2009, but expects that it will be written down to nil," the company, based in Melbourne, said in a statement. "Crown is under no obligation and has no current intention to contribute any further equity or debt to Fontainebleau or participate in any restructuring under any bankruptcy arrangements."
The lack of enthusiasm by Crown in pumping more money into Fontainebleau, which filed for bankruptcy Tuesday, isn't surprising.
Crown, run by businessman James Packer, has already taken hundreds of millions of dollars in write downs on its U.S. investments in Station Casinos Inc., Harrah's Entertainment Inc. and on a now-canceled project to build a resort on the Las Vegas Strip at the site of the former Wet ‘n’ Wild water park.
Crown this year also dropped its planned $1.75 billion purchase of Las Vegas-based Cannery Casino Resorts amid regulatory approval delays; and instead paid a $50 million deal termination fee and invested $320 million in the company.
The three Fontainebleau entities that filed for bankruptcy said that combined, they had debt of more than $1 billion, assets of more than $1 billion and more than 1,000 creditors. They have not yet filed a list of secured creditors. That list is important because the secured creditors in a bankruptcy case typically are key players in deciding the future of the debtor.
Fontainebleau Las Vegas LLC, Fontainebleau Las Vegas Holdings LLC and Fontainebleau Las Vegas Capital Corp. all filed for Chapter 11 bankruptcy protection Tuesday in Miami and blamed a group of banks for failing to provide nearly $800 million needed to complete construction of the resort.
Observers, however, have noted the project faced other problems that may have caused the banks to declare an event of default on the loan agreement.
Besides the weak gaming and hotel environment in Las Vegas marked by an oversupply of hotel rooms, there were reports and claims that the $2.9 billion Fontainebleau faced cost overruns, that it failed to sell enough condominiums and that the development was mismanaged.
In announcing the bankruptcy filing, Fontainebleau said it would seek financing to recommence construction of the resort -- now 70 percent complete -- while pursuing its legal claims against the banks.
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failures. and we lose Wet'n'Wild because of this fiasco?
James Packer is proof that sometimes, the apple can fall far from the tree. His old man Kerry was a genius, but his children are dopes. They have blown billions of dollars all over the planet. and can't seem to stop. Australia is a beautiful country, but obviously it has its share of losers, too. Sad...
Another bad investment by an offspring who thinks he's as smart as his dad...he was the guy who bailed on the Cannery at $1.3 billion (lol)..more money than brains
I never got their random investing either.
Sounds like Crown lost their shirt, pants and socks in this Fountainbleau disaster.
Fountainbleau might qualify as a big waterpark, aquarium or whatever. It will definetely not go through as a casino resort , as long as it tries to become profitable. Even if new owners can grab up that joint for 500 Million or so, I have still doubt that it will generate money. The neighborhood is shady and dangerous and too much crime scene taking place down there these days....
I will stay away from this dangerous neighborhood. Everything between Wynn and Stratosphere Tower is considered as danger zone. So watch out and always keep your hands on the gun while walking there at nights...
From Switzerland