The $200 million payment includes "$100 million which should have been funded by Dubai World," the casino operator said in a statement. "We appreciate the support of our senior lenders and the CityCenter lending group," MGM Mirage CEO Jim Murren said in a statement. "We continue to review with our partners all possible options to keep CityCenter fully funded and on a path to completion."

Dubai World subsidiary Infinity World sued MGM Mirage this time last week in Delaware Chancery Court "to protect its rights and the best interests of the CityCenter project." The lawsuit alleges that MGM's admissions of financial weakness in its annual report filed with the SEC last week constitute a breach of the CityCenter joint venture agreement and puts the multi-billion-dollar mixed-use development project at risk. Infinity World has asked for a declaratory judgment and other measures that would relieve Infinity World of its obligations under the joint venture agreement resulting from MGM's breach.

"The current path of the project is simply unsustainable given our partner's financial troubles," Dubai World stated in announcing the lawsuit. "Ensuring completion of the project on acceptable terms is why Dubai World is [filing the lawsuit]."

MGM Mirage responded to the lawsuit the following day, saying it is without merit. "Dubai World is well aware of our written commitment to meet our funding obligations and that MGM MIRAGE has available cash to satisfy those obligations [and] is ready, willing and able to fund its share of the costs to complete CityCenter, including a required payment this week," company spokesman Alan Feldman stated in an email. "We look forward to working with Dubai World to resolve any outstanding issues and complete this landmark project."

CityCenter is a mixed-use luxury residential, resort and retail complex being developed by MGM on 67 acres between the Bellagio and Monte Carlo resorts on the Las Vegas Strip. It is owned by CityCenter Holdings LLC, a joint venture equally owned by MGM and Infinity World. The complex, scheduled to open in late 2009, has been under construction since 2005.

In its annual report filed last week MGM said that it "cannot provide assurance" that its business would generate sufficient cash flow–or that future borrowings would be available—to pay its indebtedness or to fund its other liquidity needs. As a result, MGM Mirage said there is "substantial doubt" about the company's ability to continue as a going concern.

Instant Insights /

MGM Mirage Covers Partner's CityCenter Co-Pay

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