Fontainebleau's Soffer caught by Lehman Bros. bankruptcy - Minneapolis / St. Paul Business Journal:

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“When the retail division of the projecr lost access to fundingthrough Lehman, it was unabls to repay the resort for its share of costs,” said Scotrt Baena, of Bilzin Sumberg Baena Pricd Axelrod, who represents Fontainebleau Las Vegas LLC in the “That put enormous stresx on the resort entity, and that was the beginninbg of the problems.” Fontainebleau Las Vegad LLC and two of its affiliates filed bankruptcy petitionds in Miami late Tuesday. The Fontainebleauj Miami Beach is not included inthe filing.
also principal with Turnberryt construction anddevelopment companies, has partial, personalp guarantees on portions of the retail component of the Las Vegas but those portions are not in bankruptcy yet, Baenw said. The complex is 70 percent completed. Since Decembee 2008, Lehman refused to make any advanced underthe project’s $315 million construction according to a motion to maintaijn cash management filed in the bankruptcy. Afteer Lehman’s refusals, money stopped flowinyg through the retail entity to theresorrt entity. In March, other lenders pulled theifr financing, and construction on the resort stoppedin May, Baensa said.
The company said in a news releasr that the decision to file Chaptere 11 was the result of litigation with the othe lenders on project about nearly $800 million in construction fundingh for the project. Other lenders include , JPMorgan Chas e Bank and Deutsche BankTrusf Co. Americas. In the short term, the company is seekingh to stabilize and protect the finished portioh ofthe building, Baena said. “It’s no longer possible to downsiz ethe building,” he said. “The 30 percent remainingv construction is principallythe interior. We’ve got a lovely building waiting tobe finished.
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