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StumbleFontainebleau wants expedited hearing on $656 million
Wednesday, June 10, 2009 | 8:26 p.m.
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Sun Archives
- 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
The bankrupt Fontainebleau resort moved Wednesday for a quick resolution of its dispute with bank lenders.
Fontainebleau Las Vegas LLC said it filed a motion for partial summary judgment in its lawsuit against its revolver loan lenders. The motion asked a Miami bankruptcy judge for an expedited hearing on Fontainebleau's claim those lenders breached their commitment to lend $656 million to the project.
Fontainebleau, with 63 stories and 3,800 rooms, was about 70 percent complete when work ground to a halt on the resort on the Las Vegas Strip this spring because of the dispute with the lenders.
Fontainebleau -- which previously said the banks had committed to fund $790 million needed for the project -- is now asking that the $656 million be turned over to it immediately.
Lawyers for Fontainebleau Las Vegas said a quick decision to force the banks to fund the revolving credit facility will greatly increase the likelihood of allowing construction to resume promptly on the casino resort. It will restore thousands of construction jobs, and eventually create more than 8,000 permanent jobs for the Las Vegas economy, Fontainebleau said.
"Prompt adjudication of this motion will assist in the ultimate disposition of this case by establishing the revolver banks’ breach and plaintiff’s right to hundreds of millions of dollars in additional cash collateral," Fontainebleau said in the motion. "Indeed, a favorable resolution of this litigation is the only means by which to obtain funding to complete construction of the project.’’
Fontainebleau Las Vegas alleges that the revolver banks "seized upon a deliberate misreading of the (Fontainebleau) credit agreement to evade their obligations."
At issue, Fontainebleau says, is the revolver banks' refusal to fund the $656 million revolving loan request because, they said, a $1.05 billion term loan facility had not been fully drawn upon. Fontainebleau insists it fully drew upon the $1.05 billion term loan before seeking the $656 million revolver loan.
"This lawsuit is an important and valuable asset of Fontainebleau Las Vegas’ bankruptcy estate and its resolution is essential to a resumption of construction and a successful reorganization," said David Friedman, an attorney for Fontainebleau Las Vegas with the New York firm of Kasowitz, Benson, Torres & Friedman LLP.
The revolver lenders are led by Bank of America, where a spokeswoman on Wednesday said the bank isn't commenting on Fontainebleau.
Fontainebleau filed for bankruptcy protection Tuesday and so far the banks haven't said why they halted funding.
Observers have noted the project may have faced cost overruns.
They've said that, because of the recession and the oversupply of hotel rooms in Las Vegas, Fontainebleau likely would have lost money and been unable to cover its debt payments if it had opened as scheduled this year.
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OK, make the banks pay the initial investment. And let Fontainebleu pay the change orders. Hah, you know that the F doesn't have a dime, and the costs to "remobilize" with the union loafers will be massive. This predicament ain't ending anytime soon. Want to buy a condo on the Strip? Want to live on the wrong end of it? Go for it....
lol, the problem is that the entire tower needs to be lifted hup by some mega-chopter and then to be transfered anywhere nearby Caesars Palace or perhaps next to Mandalay Bay. Down there in the crack zone where the rats are chasing the dragon after midnight, I predict this entire building was a complete miss-deal and will eventually collaps just like Stratosphere Tower did many times before and will do so again.
Good luck anyway, I will follow the news on this one :)
I read the Motion described above, online, in the court's file. I'm sure it really surprised Bank of America's lawyer and made his day miserable. So sad.
It's exactly the right move to make against Bank of America, and the other lenders, because they make decisions by committee and move as slow as turtles. So you can see that Fontainbleau's plan was to lower the boom on BofA and friends right away. Will the lenders whe allegedlyu breached their contract with Fontainebleau be able to get their act together in time to defeat this motion?
However, because Fontainebleau is asking the bankruptcy court to "bend the rules" and hear this motion, even though the bankruptcy court rules say the motion could not even be filed until 20 days after the lawsuit was filed against the banks in the bankruptcy court, the judge might say "No for now".
So don't get your hopes up folks. This motion could be rejected, unless Fontainebleau's lawyers have serious juice with the judge.
If it's rejected, they can just polish up the Motion, add some more facts as things progress, and file it again. As a result, while funding may not happen quickly, it may indeed happen eventually.
bring back wet'n'wild ! omg