Las Vegas Casino Developer Fighting Back Against Banks

When casino developers have pulled out of their agreements to build casinos in different states, they have had to deal with the possible backlash of a lawsuit from the states. In Las Vegas, a casino developers is going after their lenders in much the same way.

The owners of the Fontainebleau are suing their lenders that cancelled a financing agreement. They are seeking $3 billion in damages, claiming the banks did not follow through on their obligations for the loans.

The Wall Street Journal reported that the project, "which was nearing completion, is doomed to failure, and thousands of Las Vegas residents will lose their jobs." The project was one of a couple that the city of Las Vegas was counting on to revive their slumping casino industry.

The city is in a tough situation when it comes to expansion. Las Vegas is in desperate need for a boost from some new properties, but the hotel rooms that come with the new resorts could be devastating to an already saturated hotel market.

MGM Mirage is currently moving forward with their CityCenter project. Another project, Echelon, has stopped construction and is not moving forward because of the economy. All of these projects were supposed to bring thousands of employment opportunities.

The group of lenders named in the lawsuit was extensive. Eleven banks were named, but they claim they had good reason to stop the financing. They allege that the financing was shut down because Fontainebleau was in default of their loans.

April 25, 2009
Posted By April Gardner
Staff Editor, CasinoGamblingWeb.com
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