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Carl Icahn gets OK for Fontainebleau at bankruptcy hearing

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Sam Morris

The hulking shell of Fontainebleau sits dark on the Strip. Construction was halted on the resort in summer 2009 after lenders pulled $800 million in financing.

Updated Wednesday, Jan. 27, 2010 | 8:47 a.m.

Carl Icahn

Carl Icahn

The sale of the Fontainebleau Las Vegas to billionaire Carl Icahn was approved during a bankruptcy hearing today in Miami.

After hearing testimony from the court-appointed examiner, Bankruptcy Judge A. Jay Cristol approved the sale at about 8 a.m. Las Vegas time.

Icahn emerged as the only qualified bidder to purchase the stalled Strip property last week after two potential competitors failed to enter bids by Jan. 15. Icahn’s offer of $150 million includes a cash payment of $105 million and $45 million in financing. Icahn offered $156 million in cash and financing for the property in November, including $105 million in cash and $51 million in financing, but Fontainebleau bankruptcy lawyer Scott Baena said during today's hearing that the cost of financing is expected to be less as they move toward closing.

Fontainebleau bankruptcy lawyer Scott Baena said he was surprised Icahn was the only qualified bidder but said it showed the instability of the project and the Las Vegas economy.

Regional casino operator Penn National Gaming had been scouting the property for months but dropped out of the bidding process after Icahn outbid the company by $10 million.

Some $1.675 billion has been borrowed against the project and contractors have asserted liens of $424 million against it. On top of that, it's projected to cost another $1 billion to $1.5 billion to complete the resort.

Fontainebleau’s developers had already spent $2 billion on the project when lenders pulled financing, forcing the property to file for bankruptcy in June.

The closing date for the sale will be no later than Feb. 9.

Separate from the Fontainebleau acquisition, the Nevada Gaming Commission approved the licensing of Icahn’s Tropicana Entertainment LLC to control three Nevada properties last week, positioning the company to oversee nine casinos in four states.

With an estimated net worth of $9 billion, Icahn is ranked No. 43 on Forbes' list of the world's wealthiest people.

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