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LAS VEGAS-The three entities behind the Fontainebleau resort project at the north end of the Las Vegas Strip filed for protection from creditors under Ch. 11 of the US Bankruptcy Code. The plus-$3-billion project, which is 70% complete, stalled after final-stage lenders reneged on their $800-million financing commitment last month after claiming the borrower defaulted. The project’s top executive, Glenn Schaeffer, resigned last week, leading many to speculate that a bankruptcy filing was imminent.

The bankruptcy filings of the three entities will be processed jointly and their lawsuit against the final-stage lenders will be heard by the same judge, according to court documents. The entities are Fontainebleau Las Vegas, Fontainebleau Holdings LLC and Fontainebleau Las Vegas Capital Corp. The filing, made in the US Bankruptcy Court for the Southern District of Florida, lists between 1,000 and 5,000 creditors, and assets and liabilities each in excess of $1 billion. Howard C Karawan, Fontainebleau’s chief operating officer since 2007, is now the company’s chief restructuring officer.

The top three creditors beyond the lenders are Corporate Express, which provides companies with office supplies, furniture, facility supplies, computer and imaging supplies and is allegedly owed $3.3 million; Bally Technologies, which makes casino systems and slot machines and is allegedly owed $1.9 million; and Minibar North America, which sells and installs those well-stocked little fridges in hotel rooms and is allegedly owed $1.8 million.

Fontainebleau is a 24-acre, 3,800-room resort heretofore on track to open this fall across from Circus Circus. Until recently, there were 3,300 workers on the site trying to meet the original fall 2009 completion date, after which it would have employed 6,000 permanently. There are currently a few hundred workers on site as the remaining executives continue to seek the financing necessary to complete the project.

In late April , Fontainebleau Las Vegas LLC filed a $3-billion lawsuit against 11 lenders in Clark County District Court, alleging they went back on contractual commitments to provide nearly $800 million in revolver financing needed to complete the resort. The developers and term lenders have already have invested more than $2 billion of debt and equity in the 63-story project.

The revolver lenders notified Fontainebleau developers on April 20 that they had “terminated” their agreement to provide the revolver loan due to one or more “events of default” that were not specified, according to the complaint filed on April 23. The developers claim they have not defaulted on any part of the agreement.

Earlier this month , Fontainebleau supplemented their lawsuit, claiming Deutsche Bank AG, one of the revolver lenders, has “sought to persuade other revolver banks to breach their commitments and has worked aggressively to discourage” a solution in order to minimize competition with Cosmopolitan, another resort project under construction on the Strip that Deutsche Bank took control of last year after the developer defaulted.

“In so doing, Deutsche Bank has breached the covenant of good faith and fair dealing…,” states the amended complaint.

Deutsche Bank had committed to providing 10% of the $800 million in revolver financing for Fontainebleau. The German bank has said the allegations are “meritless” and meant only to “distract” from the fact that the loan covenants have been breached.

The lenders named in the lawsuit are Bank of America, JPMorgan Chase, Merrill Lynch Capital Corp., Barclays Bank PLC, Deutsche Bank Trust Company Americas, Royal Bank of Scotland PLC, Sumitomo Mitsui Banking Corporation New York, Bank of Scotland, HSH Nordbank AG, Camulos Master Fund LP and MB Financial Bank NA. The list does not include one revolver lender with a $10 million commitment that is in FDIC receivership and is therefore not part of the suit.

Non-debtor affiliates of the Fontainebleau entities that filed Ch. 11 include Fontainebleau Las Vegas Retail Parent LLC, Fontainebleau Las Vegas Retail Mezzanine LLC and Fontainebleau Las Vegas Retail LLC. The entities signed a long-term lease for 286,500 square feet of Fontainebleau’s retail component, which is slated to include signature restaurants, marquee nightclubs and related amenities.

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