Fontainebleu Las Vegas Buyer Fell Short

Although the bankrupt Fountainebleu Las Vegas found a potential new buyer sent a letter to U.S. Bankruptcy Judge A. Jay Cristol broaching a “preliminary, non-binding indication of interest” in obtaining the partially built casino resort project for $350 million. In this letter, Eugene Hill, the chief executive of Craig Road Development in Las Vegas, said that his company and “certain investors” are in contact with the U.S. Army about accessing a resort for military personnel and veterans.

“This letter is just a letter. It’s not an offer,” said Scott Baena, a Miami-based attorney for the Fontainebleau Las Vegas. “The judge quite correctly advised the author of the letter-who we’ve not talked to-that there is a process under way and if he wants to make a bid he needs to go through that process.”

In the reply letter sent today, Cristol told Hill an auction of the Fontainebleau Las Vegas is set for Jan. 21, 2010 and directed him to coordinate his efforts with the debtor. The case is being handled in Miami. “If your organization is interested in participating in the sale, which will be an auction with an opening bid by a stalking horse bidder in the amount of $105 million, your participation would no doubt be most welcome by the parties with a financial interest in this reorganization procedure,” Cristol wrote.

On November 23rd, corporate raider Carl Icahn started a bidding war for the Fontainebleau Las Vegas, pledging about $155 million to set the minimum price for the unfinished casino hotel. Icahn would bid $105 million for the project, plus loan up to $50 million to pay for the project’s bankruptcy expenses through the sale. He outbid a rival offer, and won the right to be the opening bidder for the project when the court holds an auction for the tower. Penn National Gaming, a Pennsylvania casino operator had offered $105 million as an opening or “stalking horse” bid for the project, and later tried to beat Icahn’s offers, but stopped at $145 million.

Fontainebleau Miami Beach owner Jeffrey Soffer launched the Vegas project in 2007 in an effort to create a global chain of Fontainebleau casino resorts, but The Fontainebleau Miami Beach isn’t part of the Vegas bankruptcy case.

Via: Miami Herald