Monday, Nov. 2, 2009 | 1:22 p.m.
- Subcontractors fall short in effort to move Fontainebleau case (10-26-2009)
- Executive named examiner in Fontainebleau bankruptcy case (10-16-2009)
- Fontainebleau president among execs leaving project (10-15-2009)
- Fontainebleau a symbol of bad timing, not the only victim (10-12-2009)
- Fontainebleau judge wants quick sale of bankrupt project (10-2-2009)
- In reversal, Fontainebleau lenders suggest liquidation (9-25-2009)
- Fontainebleau: Bank no longer ‘seeking to destroy’ project (9-17-2009)
The developer of the stalled Fontainebleau resort in Las Vegas plans to appeal two key legal rulings in its lawsuit against banks over their decision to stop funding for the project.
In a ruling that appeared to signal the end of Fontainebleau Las Vegas LLC's development of the resort, U.S. District Judge Alan Gold in Miami on Aug. 26 sided with Bank of America and other Fontainebleau revolving-loan lenders in the banks' interpretation of the credit contract at issue.
Gold at that time rejected Fontainebleau's motion for partial summary judgment and an order that the banks immediately turn over $656 million in planned funding needed to restart construction of the project.
A separate group of term lenders, part of a $1 billion term-loan group that had been supportive of Fontainebleau, later cited that ruling when it moved for Fontainebleau's Chapter 11 bankruptcy case be converted to a Chapter 7 liquidation. The bankruptcy judge instead appointed an examiner to supervise the sale of the project.
But in court papers filed Friday, Fontainebleau said it wants to appeal Gold's ruling to the 11th U.S. Circuit Court of Appeals. It also wants to appeal his ruling moving the lawsuit from the bankruptcy court to U.S. District Court.
Mediation in the lawsuit, in the meantime, has been unsuccessful and the parties reached an impasse, court records show.
"The court’s orders raise issues of law concerning which there are substantial grounds for difference of opinion," attorneys for Fontainebleau said in Friday's filing.
They said the issues it wants to appeal should be decided as soon as possible, not at the conclusion of the lawsuit, because of time constraints facing the bankrupt company.
Fontainebleau said the lawsuit remains "an important part of its efforts to reorganize."
"Deferring an appeal until the conclusion of these proceedings would undermine those efforts, and -- even if successful -- would almost certainly come too late to be of any real assistance," the company said in its filing.
The casino resort developer also said resolution of the issues it wants to appeal would help resolve four other lawsuits related to the banks halting funding this spring after, they said, Fontainebleau defaulted on the loan agreement because of cost overruns and other problems.
Two of those lawsuits pit certain term lenders against the revolver lenders; a third suit was filed by certain term lenders against Fontainebleau; and a fourth was filed by revolving lender Deutsche Bank against Fontainebleau chief Jeffrey Soffer over loan guarantees.
Fontainebleau has borrowed $1.675 billion against the unfinished project -- once valued at $2.9 billion -- and estimates to complete it have ranged from $1.5 billion to $2 billion.
Besides dealing with lenders' claims against the 63-story, 3,815-room resort, Fontainebleau last reported that as of Aug. 17, $615 million of contractor liens had been filed in the case.