Strip project is seeking bankruptcy

The rumored bankruptcy of another financially troubled Strip project became reality late Tuesday night when Fountainebleau Las Vegas and two of its affiliates filed for Chapter 11 bankruptcy protection in Florida.

The 142-page bankruptcy petition was filed about 11 p.m. EST in U.S. Bankruptcy Court in the Southern District of Florida, ending almost seven weeks of speculation about the future of the project.

The $3.1 billion mixed-use project, owned by Miami-based Fontainebleau Resorts, listed more than $1 billion in assets against more than $1 billion in estimated liabilities.

The filing said the developer has between 1,000 and 5,000 creditors.

"It is unfortunate that our lenders forced us to take this step. By reneging on the revolving credit facility, they effectively shut down the project and put thousands of people out of work," Howard Karawan, chief restructuring officer of Fontainebleau Las Vegas, said in a statement Tuesday night. "Our goal now is to secure funding to complete this world-class project and restructure our existing debt."

Fontainebleau Las Vegas has reached a provisional agreement with some of its lenders to let the developer use its available cash during its bankruptcy case. The developer said it is also in negotiations to obtain financing to recommence construction on the project.

Additionally, the developer announced it has dropped the $3 billion lawsuit it filed in Las Vegas against some of its lenders and refiled the case in the bankruptcy court where the Chapter 11 petitions were filed.

Fontainebleau’s attorneys filed the lawsuit April 23 against a group of banks led by Bank of America and JP Morgan Chase after they backed out of an agreement to provide $770 million in financing to complete the Strip project. The banks said Fontainebleau had defaulted on a loan, a claim the developer has denied.

Also, the developer has accused Deutsche Bank, which controls $80 million of the loan, of a conflict of interest because of the bank’s ownership of the competing Cosmopolitan project.

"Fontainebleau Las Vegas will continue to aggressively prosecute claims against these lenders for failing to honor their contractual commitments," Scott Baena of Bilzin Sumberg, bankruptcy counsel to the company, said. "The damage caused by the bad faith of these lenders has not only caused financial hardship to Fontainebleau Las Vegas and its employees, but also to the company’s creditors throughout the United States, when economic circumstances are such that they can least afford it."

The filing lists 20 unsecured creditors, led by Chicago-based Corporate Express Inc. with $3.4 million owed to the company.

A list of secured creditors is traditionally filed within a few days of the original filing.

The two affiliates, Fontainebleau Las Vegas Holdings and Fontainebleau Las Vegas Capital Corp., filed separately Tuesday night.

Fontainebleau Las Vegas Holdings listed less than $50,000 in assets against more than $1 billion in estimated liabilities. The filing marked between 200 and 999 estimated number of creditors.

Fontainebleau Las Vegas Capital Corp., listed similar assets, liabilities and creditors.

Steve Redlinger, spokesman for the Southern Nevada Building and Construction Trades Council, an umbrella group of 17 labor unions that had been working on the project, said the bankruptcy filing is the unfortunate culmination of the banks pulling their funding.

"The reality is the project has been in jeopardy for a few weeks now," Redlinger said. "The project has been at a near standstill without the developer being able to secure financing. The end result of the banks not living up to their original obligations is to put thousands of workers out of work."

About 3,000 construction workers were laid off in late April. Many employees in Fontainebleau Las Vegas’ corporate office were let go last month.

Redlinger said the shutdown of the project affected not only the workers laid off in April but also the thousands of people who would have been hired once the resort opened. It was scheduled to open in October.

Speculation of a bankruptcy increased when Fontainebleau Resorts’ co-founder and top executive, Glenn Schaeffer, left in late May.

Schaeffer was a former executive of Mandalay Resort Group with more than 25 years as a chief financial officer in the casino industry.

Schaeffer co-founded Fontainebleau Resorts in May 2005 with Miami-based developer Jeffrey Soffer. Soffer is majority owner of the company and a principal with condominium developer Turnberry Associates.

Fontainebleau Las Vegas was designed as a 3,815-room hotel-condo-casino project with a large retail center, restaurants, spa and other amenities.

Fontainebleau Miami Beach, which is a separate legal entity, is not included in or affected by the filing, the company said.

Contact reporter Arnold M. Knightly at or 702-477-3893.

NSPCA Gets Kittens From LA
Man killed during road-rage incident
Las Vegas police are looking for two men involved in the shooting death of a man outside a 7-Eleven story at Bonanza Road and Maryland Parkway on Nov. 12, 2018. (Las Vegas Metropolitan Police Department)
VA Southern Nevada Healthcare System hosts Veterans Day Car Show and BBQ
The 4th Annual Veterans Day Car Show and BBQ is held in celebration of Veterans Day at the VA Southern Nevada Healthcare System Medical Center in North Las Vegas, Saturday, Nov. 10, 2018. (Caroline Brehman/Las Vegas Review-Journal)
Wildfires in Southern California
Wildfires hit Ventura County, Calif., on Nov. 9, 2018. (Richard Brian/Las Vegas Review-Journal)
Dedication of Nevada's Battle Born memorial
The state of Nevada on Friday dedicated its Battle Born memorial honoring 895 state residents who have died in America’s wars.
Las Vegas police and Sunrise Children's Hospital hope to prevent infant deaths
The Metropolitan Police Department and Sunrise Children's Hospital held a press conference to get the message out on preventable infant deaths attributed to "co-sleeping" and other unsafe sleeping habits. (K.M. Cannon/Las Vegas Review-Journal)
No serious injuries after car hits tree in south Las Vegas
One person reported minor injuries but wasn’t hospitalized after a Wednesday morning crash in the south valley.
Nellis Air Force Base keeps airmen fed
Nellis Air Force Bass airmen have delicious and healthy food items, and a variety of dining facilities to choose from. (K.M. Cannon/Las Vegas Review-Journal)
Suspicious package found at central Las Vegas post office
Las Vegas police determined that a suspicious package found Monday morning at a central valley post office was not a threat.
Suspicious package found at central Las Vegas post office
Police evacuated the area around the Garside Station post office early Monday morning near Oakey and Decatur boulevards.
With husband's passing, family in limbo for workers' comp claim
Meredith Tracy's husand, Russell Tracy, died more than a year ago on his first day working for a new company when he fell 22 feet into a manhole that was not properly safeguarded. His employer was fined $82,000 in penalties for unsafe practices, but the company has denied her workers' compensation claim, leaving her with no compensation since the death. Rachel Aston Las Vegas Review-Journal @rookie__rae
With husband's passing, family in limbo for workers' comp claim
Meredith Tracy's husand, Russell Tracy, died more than a year ago on his first day working for a new company when he fell 22 feet into a manhole that was not properly safeguarded. His employer was fined $82,000 in penalties for unsafe practices, but the company has denied her workers' compensation claim, leaving her with no compensation since the death. Rachel Aston Las Vegas Review-Journal @rookie__rae
Las Vegas family shares flu warning
Carlo and Brenda Occhipinti lost their son, Carlo Jr., or “Junior,” to the flu last year.
Author Randall Cannon shares an anecdote about Stadust Raceway
Author Randall Cannon shares an anecdote about Dan Blocker, who played Hoss Cartwright on the TV show "Bonanza," and the actor's passion for auto racing at Stardust International Raceway in Las Vegas during the 1960s. (Ron Kantowski/Las Vegas Review-Journal.)
Project Neon 85 percent complete
On Wednesday morning Oct. 31, Interstate 15 northbound lane restrictions were removed opening up Exit 41 to Charleston Blvd. On Thursday Nov. 1, Interstate 15 southbound lane restrictions were removed. The new southbound off-ramp to Sahara Ave. and Highland Dr. also opened Thursday, November 1. With Project Neon 85% finished the flow of traffic on Interstate 15 has substantially diminished. (Michael Quine/Las Vegas Review-Journal)
Girl killed after jumping from bridge onto 215 Beltway in Henderson
Eastbound lanes of the 215 Beltway are shut down by the Nevada Highway Patrol after a female juvenile jumped from the 215 overpass at Stephanie and was struck by a FedEx tractor trailer. Michael Quine/Las Vegas Review-Journal @Vegas88s
Kristallnacht story
An interview with 94-year-old Holocaust survivor Alexander Kuechel who survived seven concentration camps and didn’t leave Germany until after World War II was over. (Mia Sims/Las Vegas Review-Journal)
1 dead in central Las Vegas crash
An early Wednesday morning crash left at least one person dead and another injured. The crash was reported just around 3 a.m. at the intersection of Flamingo Road and Swenson Street. At least two vehicles were involved in the crash, one of which caught fire. Debris was scattered across the intersection as police combed the area as they investigated the scene. Flamingo is blocked in both directions between Swenson and Cambridge Street. Northbound Swenson is blocked at the intersection.
Richard Knoeppel named the 2018 Nevada Teacher of the Year
Richard Knoeppel, an architecture design instructor at the Advanced technologies Academy, named the 2018 Nevada Teacher of the Year on Monday, Oct. 29, 2018. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Mojave Poppy Bees
(Zach Portman/University of Minnesota Department of Entomology) Male Mojave poppy bees exhibit territorial fighting behavior. The Center for Biological Diversity wants the bee, found only in Clark County, to be added to the endangered species list.
Clark County Schools announce random searches
Clark County School District middle and high school students will be subject to random searches for weapons under a new initiative to combat the wave of guns found on campus. (Amelia Pak-Harvey/Las Vegas Review-Journal)
Ron Jeremy and Heidi Fleiss React to Dennis Hof's Death
Ron Jeremy and Heidi Fleiss speak about their friend and prominent brothel owner Dennis Hof's death at Dennis Hof's Love Ranch. (Benjamin Hager/Las Vegas Review-Journal)
Nevada brothel owner Dennis Hof has died
Nevada brothel owner and Republican candidate for Nevada State Assembly District 36, Dennis Hof has died. He was 72. Nye County Sherriff's office confirmed. Hof owned Love Ranch brothel, located in Crystal, Nevada.
Las Vegas police investigate suspicious package at shopping center
Las Vegas police evacuated a southeast valley shopping center at Flamingo and Sandhill roads early Tuesday morning while they investigated reports of a suspicious package. (Max Michor/Las Vegas Review-Journal)
The Las Vegas Metro hosts the K-9 Trials
The Las Vegas Metro K-9 Trials returns to the Orleans Arena to benefit the Friends For Las Vegas Police K-9 group.
Kingman residents love their little town
Residents of Kingman, Ariz. talk about how they ended up living in the Route 66 town, and what they love about their quiet community. (K.M. Cannon/Las Vegas Review-Journal)
Service at Southern Nevada Veterans Memorial Cemetery
Twelve unclaimed veterans are honored at Southern Nevada Veterans Memorial Cemetery in Boulder City in Oct. 9, 2018. (Briana Erickson/Las Vegas Review-Journal)
Las Vegas house prices reach highest level in 11 years
Las Vegas house prices are rising But so is the amount of available homes on the market Still, properties priced below $300,000 are selling fast And September was the first time since June 2007 that the median house price reached the $300,000 mark Las Vegas home prices have been rising at one of the fastest rates in the country over the past year Recent data show the market is now less affordable than the national average
National Night Out
About 100 Summerlin residents gathered at Park Centre Dr. in Summerlin on Tuesday for National Night Out. Lt. Joshua Bitsko with Las Vegas Metro, played with 3-year-old David who was dressed as a police officer. Face painting, fire truck tours and more kept kids busy as parents roamed behind them. (Mia Sims/Las Vegas Review-Journal)
Rural homeless issue comes to a head in Pahrump
On Sept. 12, Pahrump sheriff deputies told residents of a homeless encampment on private property that they had 15 minutes to vacate and grab their belongings. That decision might face some legal consequences. (Rachel Aston/Las Vegas Review-Journal)
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like