Carl Icahn is expected to take over ownership of the bankrupt Fontainebleau Las Vegas resort after two potential competitors vying to buy the property failed to submit qualifying bids as of a 5 p.m. deadline Friday.
The U.S. Bankruptcy Court in Miami, where Fontainebleau filed for bankruptcy protection last year, is expected to conduct a hearing Jan. 27 to approve the sale of the Las Vegas Strip property to Icahn, who bid $156.2 million for it last year. [...]
Icahn could not be reached for comment. In a court filing, attorneys for Examiner Jeff Truitt said Truitt received two "submissions" for Fontainebleau on the bid deadline. The filing didn't identify the parties that made the submissions.
"However, for various reasons, including that neither of the submissions were accompanied by either the requisite deposit or satisfactory evidence of the financial ability to close a sale transaction, the examiner has determined that the submissions are not qualified bids," the court filing said. "Accordingly, the only qualified bid received by the examiner is the Icahn Nevada Gaming Acquisition LLC bid. Based on the foregoing and in accordance with the bidding procedures, there will be no auction for the assets."
San Francisco real estate investor Luke Brugnara is also trying to bid on F-bleau, but it doesn't look like the court wants him anywhere near this property. Lesson learned, kids... Don't come to a cash game begging for credit.
And what exactly will become of F-bleau once Icahn does take control as now expected? No one knows for sure, except everyone seems to agree this means the finished project most likely won't completely resemble what original developer Jeffrey Soffer had planned for it.
And not that long ago, Liz Benston read the tea leaves and offered a strong possibility for Fontainebleau's future.
With lower and middle classes flocking to Las Vegas during boom years, Stratosphere [Icahn's last big Vegas purchase] was in the right place at the right time.
Perhaps Icahn wants to create a mid-market resort out of Fontainebleau — a strategy that might appeal to bargain-hunting tourists soured on fancy hotels. The property might complement the nine casinos Icahn is acquiring as part of Tropicana Entertainment, which includes the MontBleu resort in Stateline, Tropicana Express in Laughlin and Tropicana resort in Atlantic City. (The Tropicana in Las Vegas, acquired by another buyer out of bankruptcy, wasn’t part of the deal.)
Or perhaps Icahn is bluffing.
In one sense, he has shown his hand. Icahn has gone where other investors have feared to tread — making a fortune on the business missteps of others. [...]
While $156 million sounds like a steal, it might still be too much for others — without Icahn’s knack for timing — to stomach.
This may make sense, as it seems The North Strip (or at least everything north of Wynncore) is destined (or doomed, depending on one's point of view) to remain a lower-end "Vegas experience". There's still a possibility Icahn may not do anything but let it rot a la Echelon for a couple year, but judging by Icahn's past Vegas moves it seems more likely he'll finish F-bleau, but not in the uber-high-end manner that Soffer and his Miami buddies had intended. Instead, he may spend less than the $1.5 billion that Penn National Gaming suggested was needed to finish the project (as Soffer had intended) and open F-bleau (Or is it "New Tropicana"? Or "Stardust Reborn"?) as a more mid-range or bargain casino.
Who knows? Maybe we're all wrong? Or maybe Carl Icahn has a few more tricks up his sleeve that he doesn't yet want to show us?