Businesses file suits claiming Fontainebleau bills went unpaid

Thursday, June 18, 2009 | 7:34 p.m.

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)

Even as the stalled Fontainebleau casino resort tries to reorganize its finances in Miami bankruptcy court, lawsuits over unpaid bills for the project are accumulating in Las Vegas outside of the bankruptcy process.

Since June 11, at least three subcontractors have sued Fontainebleau's general contractor, Turnberry West Construction Inc., over work they did at the resort.

In suits filed in Clark County District Court, Desert Plumbing & Heating Co. says it is owed $6.249 million; while PCI Group LLC and F. Rodgers Corp. didn't specify in their lawsuits how much they are owed.

Besides suing Turnberry West, PCI Group and F. Rodgers are suing Western Surety Co. in hopes of recovering funds under Turnberry's performance bond.

A spokesman for Turnberry West on Thursday said the company knew of no such suits and therefore could not comment on them. There's typically a delay between the time when suits are filed and when they are served on defendants.

Desert Plumbing & Heating said it was hired to work on the $2.9 billion resort's tower, garage, convention center, central plant, podium and garage; and that it stopped work on the project on Las Vegas Boulevard on May 13.

The subcontractor said that not only did Turnberry West fail to pay all that it's owed, it said Turnberry West breached an implied covenant of good faith and fair dealing.

"Turnberry West breached that duty by performing in a manner that was unfaithful to the purpose of the subcontracts," Desert Plumbing & Heating's suit charged. "Specifically, Turnberry West knew or should have known that it would be unable to honor Desert Plumbing's payment applications, but still required Desert Plumbing to perform its obligations."

Turnberry West, known in Las Vegas for building high-rise Turnberry condominiums, is controlled by the Soffer family of Miami. The Soffers are also developers of Fontainebleau.

While some of the Fontainebleau development companies filed for bankruptcy protection last week, Turnberry West was not among them.

The companies filing for bankruptcy were Fontainebleau Las Vegas Holdings LLC, Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas LLC.

In two of the cases, Turnberry West is listed as a creditor.

In the Fontainebleau Las Vegas LLC case, the company listed assets and liabilities of more than $1 billion apiece and estimated the number of creditors in the case would be 1,000 to 5,000.

Fontainebleau Las Vegas LLC is also the entity suing Bank of America and other banks that declared the project, 70 percent complete, to be in default on its construction loan and halted funding this spring.

Fontainebleau says this decision to shut off funding led to the bankruptcy filing last week and now Fontainebleau is asking the court to order the banks to release $656 million so the project can get back on track.

The banks, however, said they were told earlier this year by Fontainebleau officials that they planned to put the project into bankruptcy because of its financial problems.

Besides Bank of America, the lenders under a revolving loan agreement being sued are Merrill Lynch Capital Corp., JPMorgan Chase Bank, Barclays Bank PLC, Deutsche Bank Trust Company Americas, the Royal Bank of Scotland PLC, Sumitomo Mitsui Banking Corporation New York, Bank of Scotland, HSH Nordbank AG and MB Financial Bank N.A.

Discussion: 9 comments so far…

By nednougat

6/18/09 at 9:59 p.m.

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Wow, the Union loafers bring down another project. Can you imagine how much they will throw into this mess, including the kitchen sink, into this claim? But pretty soon, it will all be over, and they'll all be collecting UI. New jobs-$12.00/hr for a plumber. $10.00 for a carpenter. And lucky to get it. Sorry guys, the good times are over...
By Kennyb73

6/18/09 at 10:31 p.m.

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I worked on this project and have been unemployed since!
I watch CNN everyday!Where"Lou
Dobbs about this story!CNN you should be ashamed of yourself
To let Bank of America to pay for adds everyday on your
Show and not lend the Tarp money they received to keep
The American people working!Bank Of America
Has a commercial stateing there open for Business and
How great they are!Makes me sick!I no a lot of people
Also on that job who have there Mortgage threw them!Stop
Paying it!To all you scum that are happy to see
Vegas Fall and they built to many condo"s!Well come pay
My bills and feed my Family you piece of trash!Respond
To me and I"ll give you my address instead of hideing
Behind your computer!To those that have responed from
Other countries!Stay there!Vegas will rebound and you
Will all come here to blow your money and keep us all
Working!A Proud Local 357 electrician!Karma"s a bitch!
By AKQJ10

6/18/09 at 11:36 p.m.

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If I respond to you, please give me your address. That way, I will be able to send you a computer-based course on grammar in the English language. It is very user friendly and has colorful pictures and things you can click on so you don't get bored. You'd really like it I think. Promise me though that you will complete the course before posting any more comments.
By unionstrong

6/19/09 at 5:51 a.m.

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Once again Ned you have no clue. This job closing down has nothing to do with any of the trades, have you read the news? Don't worry about what the union guys get paid if you were skilled enough maybe you could have worked along side of us. If you have even comprehended any of the articles about Fontainebleu written in the sun you would know that the union's did not contribute to the shutdown. Don't worry about what the union hands will be making because we will take the 10 dollar an hour jobs away from you.
By its2hot

6/19/09 at 9:38 a.m.

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Kennyb73:

CNN is about the dumbest news station to watch if you want accurate news unless you're a democrat then enjoy the liars.
By simplyhadenough

6/20/09 at 9:24 a.m.

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hey nednougat,
What do you do for a living? And where do you do it, since it does not involve any form of reality at all. You go try to live on $12.00 per hour when a home in the Las Vegas valley used to cost $300,000 and see how long you'd last with $3.00 gasoline, power bills going through the roof, and all of the other problems of our area. Even YOU would have to live like the rest of us, with you working two jobs, you wife working two jobs, your kids and their paper routes, and your dog that works for Metro.
By bdover

6/20/09 at 1:20 p.m.

Suggest removal

simplyhadenough, calm down. I know what nednougat is talking about. I was a construction supt for years on Union jobs, and was stifled by the lack of any of the workers trying to complete a job "on time and under budget". No, they were all in the control of the business agents and their Union. Absolute loafers who made sure their afternoon break of 15 minutes became 30 minutes. Plumbers picking up their tools 45 minutes early, because they had to "wash up". Carpenters putting down their tools because a supt wanted to look in a ceiling, but because the supt lifted up the ceiling tile, instead of the loafer, they stopped work. I could go on and on. But at least we all know the good times are over, and you'd better get ready to go to Texas or North Dakota. It's over here, for a long time. Unless you want that $12.00 an hour. Of course, you'll have to ask for the BA's blessing, but since he won't have squat Union work, you'll be off to the great unknown. Don't forget the warm clothes if you're going to ND. And your kids will like Texas, where making the 10th grade is considered an achievement.
By unionstrong

6/20/09 at 2:32 p.m.

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Bdover and Ned must of been on the same crew. I have read the same comments from you and Ned. It's funny how you guys know everything and are working for 10 or 12 dollars an hour. Union jobs are too big for the both of you as stated you were a superintendent. I don't see myself leaving Las Vegas anytime soon i'm not afraid of lower wages and i have savings thanks to my union wage. What's wrong with a guy being able to go out and negotiate his own wage to get paid what he is worth. Don't get me wrong i don't have anything against non union workers their only fault is they do not want to open their eyes and learn about a fair wage for a fair day of work. I have approached non union workers to try to educate them but they do not want to pay dues or drug test.
By bdover

6/20/09 at 5:13 p.m.

Suggest removal

You can make whatever you can get, UnionS, but you won't be making beans when there is no work. You can't "not kill the job" when there isn't a job. And the Unions have driven any new work out of town. Oscar's Town Hall-gone. Mob museum-gone. Only thing still coming is the airport terminal, but I'm not sure how you can hide thousands of idlers on one project. Save your pennies, Union guy, you'll need it for gas in the UHaul. 12 mpg gets expensive....

BTW-I'm retired from Bechtel. Management. Made a bundle. Had to put up with you sorry loafers for years. Life is sweet now...

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