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Fontainebleau Resort on the north end of the Las Vegas Strip is shown under construction.
Thursday, Nov. 26, 2009 | 2:05 a.m.
Sun Archives
- Penn National’s bid sets up auction for Fontainebleau (11-5-2009)
- Fontainebleau subcontractors organize to finish project (11-17-2009)
- Fontainebleau developer plans appeal of rulings (11-2-2009)
- Subcontractors fall short in effort to move Fontainebleau case (10-26-2009)
- Executive named examiner in Fontainebleau bankruptcy case (10-16-2009)
- Fontainebleau president among execs leaving project (10-15-2009)
- Fontainebleau a symbol of bad timing, not the only victim (10-12-2009)
- Fontainebleau judge wants quick sale of bankrupt project (10-2-2009)
- In reversal, Fontainebleau lenders suggest liquidation (9-25-2009)
- Fontainebleau: Bank no longer ‘seeking to destroy’ project (9-17-2009)
Contractors owed hundreds of millions of dollars for work on the Las Vegas Fontainebleau casino-resort moved again Wednesday for the right to take over the project by making a bid for what they're owed, known as a credit bid.
Their attorneys filed a motion for credit bidding in Miami's bankruptcy court the same day that Judge A. Jay Cristol signed paperwork approving investor Carl Icahn as Fontainebleau's stalking horse bidder.
Court records Wednesday showed Icahn bid $105 million in cash and agreed to provide $51.2 million in financing for a total bid of $156.2 million -- up slightly from the $156 million discussed during a Monday hearing in which his company, Icahn Nevada Gaming Acquisition LLC, outbid Penn National Gaming to be the stalking horse.
The stalking horse bid is now the amount that must be topped should other bidders pursue the project. Cristol set a Jan. 15 deadline for bids for the project and for objections to the proposed sale; and a Jan. 27 hearing to consider approval of the sale to the high bidder.
During Monday's hearing, an effort by construction giant Tutor Perini Corp. -- builder of CityCenter and other hotel-casino projects -- to provide financing for Fontainebleau was rejected because at that time Cristol declined to confirm the extent of the contractor liens.
A Tutor Perini subsidiary is one of the Fontainebleau contractors.
"The debtor-in-possession financing offered to the debtors by Tutor Perini Corp. on the morning of the interim hearing was not on terms more favorable than those contained in the (Icahn loan) documents because, among other reasons, the former included a condition precedent that the court enter an order determining that the liens of the statutory lienholders are in a first priority position and that the statutory lienholders are holders of a credit bid of not less than $225 million that is a qualifying bid under the bid procedures adopted by the court in connection with the sale,'' Cristol's order approving the Icahn loan said Friday.
A hearing was set for Wednesday, Dec. 2, on the latest motion by the subcontractors, who claim to be owed $467.6 million and assert Fontainebleau's own records confirm their liens total at least $273 million. They're again asking Cristol to confirm the extent of their liens.
"A purchase of assets via a credit bid is the equivalent of a cash purchase," the contractors' attorneys argued in court papers.
They noted Jeff Truitt, the examiner in the Fontainebleau case, testified Monday that he preferred a "reasonable and practical credit bidding mechanism'' be part of the sale process, that "credit bidding would foster rather than hinder the sale process'' and that Icahn was not opposed to such a process.
The contractors have asserted their liens have priority over lenders' liens and several of the contractors have been working to find partners or financing to buy and complete the resort.
Besides the losses faced by contractors, lenders and bondholders owed $1.675 billion face huge losses on the project. In addition, it's estimated that whoever buys the 3,800-room Fontainebleau will have to spend $1 billion to $1.5 billion to complete the resort.
With work said to be 70 percent complete, work was halted on Fontainebleau this summer after banks led by Bank of America cut off funding due to cost overruns and other problems. Fontainebleau has so far been unsuccessful in its lawsuit against the banks over their decision to stop lending for the resort.
who ever wins the FONTAINEBLEAU - THE REAL CHALLENGE WILL BE TO MAKE THE HOTEL RIGHT & INVEST 2.5 BILLION DOLLARS !!!!
they have 3800 small rooms that will have to be redesigned to have 2,000 suites starting at
1,000.00 sq. feet up to 2,000.00 sq. feet & about 100 suites - starting at 3000 to 5,000 sq. feet & about 10 PRESIDENTIAL SUITES AT 10,000 SQ FEET - IN TO THE MIX OF THE 2,000 SUITES !!!- AN ALL SUITE HOTEL !!!
IN ORDER TO STEAL THE THUNDER AWAY FROM THE WYNN - CAESARS - VENETIAN - CITY CENTER & ECT.
& the name & the theme must be very compelling as well - because THE FONTAINEBLEAU NAME UNFORTUNATELY WAS ONLY IN ITS PRIME IN THE
1950'S & 1960'S & IT DOES NOT MEAN ANY THING TO THE UPSCALE MARKET TODAY - BETWEEN 28 & 58 YEARS OLD !!!
THE REDICULOUS STAIR WAY TO NO WHERE WAS INTERESTING IN THE 1950'S BUT ITS A JOKE TODAY FOR THE AVG. PERSON TO VIEW TODAY !!!
THAT IS YESTERDAYS NEWS & DOES NOT MAKE FOR A COMPELLING ATTRACTION !!!
THE UPPER SCALE MARKET IS CRYING OUT FOR A COMPELLING THEME THAT COULD STEAL THE THUNDER AWAY FROM THE OTHER MEGA STRUCTURES !!!
ONLY SOMEONE LIKE A JAY SARNO CAN DELIVER THE
successful mega structure theme !!!!
BELAIR HAS THE - BRAND & THEME THAT CAN STEAL AWAY THE THUNDER - BUT DOES THE NEW OWNERS HAVE THE MONEY TO SUCCESSFULLY COMPLETE THE PROJECT !
RESPECTFULLY YOURS - BELAIR --
is the suite demographic maxed out?? with people renting condos, etc. that are everywhere...
your right, the fontainebleau is for baggy polyester pants, Eldorado's Cadillacs and assorted 40s and 50s generational losers demographic
converting the rooms would be a hassle, look at the trouble Harrahs/Rio etc got into, permits etc.
looks like Dubai World took a dump...and can't pay their bills for 6 months...city center will be BK in a year...what a joke
It should be remembered that even if Judge Cristol does NOT allow credit bidding, under Section 363 of the Bankruptcy Code the cash from the sale of the Fontainebleau must be set aside for the ultimate winner of the Mechanics Lien Claimants vs. First Mortgage Holder litigation.
If the First Mortgage Holders lose the litigation, that will mean a huge claim on their lender's title insurance policy. Realtors, check out who issued that lender's title insurance policy, and think about sending your clients elsewhere. Just like AIG the insurance company tanked because of stupid business decision making, the title insurer who insured the first mortgage holder is looking at the potential for a huge loss, potentially making it unable to pay other claims.
Actually, Belair and mred, the Fontainebleau Miami has become one of the hottest celeb spots in the country. The new owners took a tired Hilton property and really jazzed it up - in fact, you can barely get a room there under $300. Fontainebleau definitely has some cache. I would suggest you both check it out...
What bothers me is this:
"The contractors claim to be owed $467.6 million and assert Fontainebleau's own records confirm their liens total at least $273 million". It's obvious that the contractors throw the kitchen sink, bad weather, their child support and anything else that can be used to exaggerate their claim. Which is OK, except the judge is trying to determine who gets in line first-the primary lien holders, or the mechanics lien holders. Since the claims are being adjudicated in FL, it looks like the mechanics liens will come in second. Best the contractors sneak into the FB, and grab whatever they can. They are screwed.
how many people follow in the footsteps of "celebs", check in and waste money? (who are probably paid to show up and throw up.)
Oh by the way, there was a story on cable TV news that US made wallboard was tainted too. google it.
I wonder if any of these projects have bad drywall? see ap story sfexaminar.com etc.
Who knows,maybe whoever finishes the place should change the name.