Construction halted at glitzy new Las Vegas casino development
Posted by Bev Freeman on 15 Jun 2009 at 15:06
Tools have been downed at an ambitious new Las Vegas casino project after a high profile bust up between the casino's developer and its lenders.
The Guardian reports work has stopped at the construction site of Fontainebleau after the developer declared itself bankrupt.
Costing $3.9 billion, the scheme includes 27 bars, gambling in the open air by pools and 1,700 slot machines. But Fontainebleau has filed for chapter 11 bankruptcy protection, the paper added.
The row broke out after the parent company said lenders including the likes of Royal Bank of Scotland reneged on commitments to supply $800 million in funding.
Previous court filings have accused another of the scheme's lenders, Deutsche Bank, claiming it had tried to torpedo the project to reduce competition with the nearby Cosmopolitan venue, owned by a subsidiary of Deutsche bank.
Quoted by the Guardian, Fontainebleau's chief restructuring officer, Howard Karawan, said: "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."
Deutsche Bank has denied the claims and said it intends to mount a vigorous defence.
Las Vegas is currently seeing something of a slump in new developments, with the Guardian adding work halted in 2008 at the $4 billion Echelon resort, due to spring up on the former site of the stardust casino, which was demolished two years ago. City Centre, another project totalling $8 billion, had to be "bailed out" earlier this year after a funding problem, the Guardian adds.
