The Fontainebleau Hotel in Las Vegas, a $3 billion project, is bankrupt and now the hotel’s developer is looking to auction off the unfinished monstrosity because he needs a little help resolving its $1 billion mess of litigation.
To start the bidding was Penn National Gambling, a publically traded company headquartered in Wyomissing, PA who owns 11 casinos across the country. Their bid was somewhat of a lowball, according to the expectations of the hotel’s developer—coming in somewhere in ballpark of $300 million. Now, keeping in mind that was just the opening bid, Penn also put the legal expenses of the bankruptcy fight on the table, to try and sweeten his low blow deal a bit. It’s a safe bet, however, that the Fontainebleau is going to be waiting for a second (and possibly third or fourth) offer before finally getting the hotel off to its new owners.
The Fontainebleau Hotel is a 3,889 room project and with construction overruns, banks cutting off their $800 million in funding just this past spring, and collapsed Las Vegas condominium market foiling financial plans for the project, it’s no wonder the hotel is seeing some hard times.