Fontainebleau's Soffer caught by Lehman Bros. bankruptcy - Boston Business Journal:

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“When the retail division of the projectt lost access to fundingthroughn Lehman, it was unable to repay the resorgt for its share of costs,” said Scott of Bilzin Sumberg Baena Price Axelrod, who representx Fontainebleau Las Vegas LLC in the “That put enormous stress on the resort entity, and that was the beginninhg of the problems.” Fontainebleau Las Vegas LLC and two of its affiliatess filed bankruptcy petitions in Miami late The Fontainebleau Miami Beach is not included in the filing.
also principal with Turnberry construction anddevelopment companies, has personal guarantees on portions of the retail component of the Las Vegasa project, but those portions are not in bankruptcyy yet, Baena said. The complex is 70 percentt completed. Since December 2008, Lehmanh refused to make any advances underthe project’ s $315 million construction loan, according to a motion to maintain cash management filedf in the bankruptcy. After Lehman’s refusals, moneyh stopped flowing through the retail entity to theresort entity. In March, other lendere pulled their financing, and construction on the resort stoppe din May, Baena said.
The company said in a news releaser that the decision to file Chapter 11 was the resulrt of litigation with the other lenders on projecyt aboutnearly $800 million in constructiohn funding for the project. Other lenderss include , JPMorgan Chase Bank and Deutsche BankTrust Co. In the short term, the companyh is seeking to stabilize and protect the finished portiob ofthe building, Baena said. “It’sd no longer possible to downsize the he said. “The 30 percent remaininvg construction is principallythe interior. We’ve got a lovely building waitin tobe finished.
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