Monday, September 14, 2009

What's Next for The Fontainebleau?

Cheese louise! This hotel isn't even open yet, but the drama's been checked in for quite some time. First there were construction problems, then the law suits started flying, then the current owners filed for bankruptcy... And now, the whole project is up in the air despite it already being 70% completed!

And now, they have to deal with this:

With the Las Vegas Fontainebleau resort bankruptcy case seemingly stalled, a group of contractors is seeking permission to pursue construction lien claims in state court in Nevada -- outside of the bankruptcy process.

The contractors, in a court filing Friday, said they want to get started protecting their lien claims in state court in part because those claims are under attack by lenders in the bankruptcy court.

The lenders' efforts to subordinate the contractors' liens is based on the questionable assumption that Fontainebleau will find funding to resume construction on the stalled $2.9 billion resort, the contractors argued.

"While the lienholders remain hopeful the debtor will find additional funds (either through an equity infusion and/or junior debt facility) to complete the project, we are 90 days into this reorganization proceeding and reality has begun to set in. After three months, debtors have identified no exit strategy nor source of additional outside capital. With no financing, no equity infusion, and no plan, it has become clear (the lienholders) are forced to take action to protect their interests."

Meanwhile, rumors have surfaced that companies like Penn National Gaming may try to gobble up The Fontainebleau in bankruptcy. And hey, why not? Oh yeah, everything that we already talked about!

Still, this Strip property may be enough of a hidden gem for these suitors to seriously consider cleaning up the hot mess to take this once-in-a-lifetime opportunity to own a Strip casino for so cheap. Heh, if only we had the money to buy this "bargain"... ;-)

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