Contractors dealt setback in Fontainebleau case

Dozens of contractors trying to get money out of the Fontainebleau bankruptcy were dealt a procedural setback Thursday by the Nevada Supreme Court.

The contractors slapped mechanics liens on the project as the money started running out three years ago. But a dispute has arisen between them and the lenders, who put nearly $1.9 billion into what is now a shell of a building.

The Fontainebleau was sold out of bankruptcy to Carl Icahn for $150 million. The dispute involves whether lenders or contractors should be first in the repayment line from the $150 million in the bankruptcy estate.

The Fontainebleau is in bankruptcy in Florida, but a judge there sent that issue back to Nevada for a ruling because it involves Nevada law. If the lenders win, the contractors have almost no chance of collecting any money.

The Supreme Court denied the contractors the opportunity to enter hundreds of pages of documents into the record. The contractors wanted the court to see that even the basic facts of the case are strongly disputed. Instead, the Supreme Court said it would stick to the record sent by the bankruptcy judge.