WORLD PROPERTY CHANNEL ®

(MIAMI, FL) -- Fontainebleau Las Vegas LLC is rolling the legal dice today. The fight is over semantics.

The company has asked  Miami bankruptcy court Jay Cristol to set a quick hearing on its motion for a partial summary judgment in the $3 billion lawsuit it has filed against nine of the most powerful lenders in North America,  Europe and Asia.

If the developer wins a favorable ruling, the planned 63-story, $2.8-billion, 3;889-room  resort and casino on the Las Vegas Strip can resume construction with a workforce of several thousand laborers.

If the motion is denied or postponed to another date, the project will continue to gather dust and rust, according to industry observers. That's the gamble the developer is taking.

On March 3, the lenders pulled out of a deal to fund the project, the largest ever built in Las Vegas to date.

They maintain the developer broke an agreement by not completing a separate term loan that is related to their collective construction loan of $656 million.  The developer argues the banks are misreading the funding contract and its clauses.
 
When the banks stopped the money spigot, the developer filed for Chapter 11 bankruptcy protection on June 9.

Lawyers for Fontainebleau Las Vegas say a quick decision to force the banks to fund the revolving credit facility "will greatly increase the likelihood of allowing construction to resume promptly on the 63-story casino resort. It will restore thousands of construction jobs, and eventually create more than 8,000 permanent jobs for the Las Vegas economy."

Fontainebleau Las Vegas alleges in its suit that the revolver banks "seized upon a deliberate misreading of the credit agreement to evade their obligations."

The lenders, however, claim that a March 2 notice of borrowing for $656 million did not comply with the credit agreement because a term-loan facility had not been fully funded.

But Fontainebleau Las Vegas alleges  the plain terms of the credit agreement required that the term loan be "fully drawn," which the March 2 notice of borrowing accomplished.

"This lawsuit is an important and valuable asset of Fontainebleau Las Vegas' bankruptcy estate and its resolution is essential to a resumption of construction and a successful reorganization," said David Friedman of New York City-based  Kasowitz, Benson, Torres & Friedman LLP. Friedman is one of the developer's lawyers. 

The revolver lenders are led by Bank of America and include JP Morgan Chase, Barclays Bank, Deutsche Bank Trust Company Americas, The Royal Bank of Scotland, Sumitomo Mitsui Banking Corp., Bank of Scotland, HSH Nordbank and MB Financial Bank.

---