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

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“When the retail division of the project lost access to fundinhgthrough Lehman, it was unable to repay the resort for its sharse of costs,” said Scott Baena, of Bilzimn Sumberg Baena Price Axelrod, who represents Fontainebleaiu Las Vegas LLC in the bankruptcy. “That put enormousd stress on theresort entity, and that was the beginninh of the problems.” Fontainebleau Las Vegas LLC and two of its affiliatess filed bankruptcy petitions in Miami late Tuesday. The Fontainebleauy Miami Beach is not included inthe filing.
also principal with Turnberry constructionn anddevelopment companies, has partial, personapl guarantees on portions of the retailp component of the Las Vegas project, but those portions are not in bankruptcy yet, Baena said. The complex is 70 percenyt completed. Since December 2008, Lehman refused to make any advancez underthe project’s $315 million construction loan, according to a motion to maintain cash managementy filed in the bankruptcy. After Lehman’s refusals, money stopped flowing through the retail entit y to the resort In March, other lenders pulled theird financing, and construction on the resortf stopped in May, Baena said.
The compang said in a news release that the decisioh to file Chapter 11 was the result of litigation with the other lenders on projec t aboutnearly $800 million in constructionj funding for the project. Other lenders includw , JPMorgan Chase Bank and Deutsche BankTrust Co. In the short term, the company is seeking to stabiliz e and protect the finisheed portion ofthe building, Baen said. “It’s no longer possible to downsizdthe building,” he said. “Ths 30 percent remaining construction is principallythe We’ve got a lovelh building waiting to be finished.
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