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| Andrew Clark
A futuristic $3.9bn casino development on the Las Vegas strip, Fontainebleau, has declared itself bankrupt and halted construction work in the latest setback for America's bustling gambling capital. A lavish, stylish project intended to boast 27 bars, open-air poolside gambling and 1,700 slot machines, Fontainebleau filed for Chapter 11 bankruptcy protection after a bitter legal row with its bankers. The hotel's Miami-based parent company has accused a group of lenders, including Barclays and Royal Bank of Scotland, of reneging on commitments to provide $800m (£490m) in funding. In court filings, it has singled out Deutsche Bank, accusing it of trying to sabotage Fontainebleau to minimise competition with the nearby Cosmopolitan, which is owned by a Deutsche Bank subsidiary. "It is unfortunate that our lenders forced us to take this step," said Fontainebleau's chief restructuring officer, Howard Karawan. "By reneging on the revolving credit facility, they effectively shut down the project and put thousands of people out of work." Deutsche has described these claims as "without merit" and has said it will defend itself vigorously. Fontainebleau joins several other foundering development projects on the strip: work stopped last year on the $4bn Echelon resort, planned on the site of the venerable Stardust casino, a Vegas landmark that was dynamited in 2007, and the $8bn City Center development had to be bailed out by MGM Mirage in March after a partner failed to provide funds. |
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