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Las Vegas

As city's tourism woes continue, Fontainebleau Las Vegas goes into Chapter 11

Jun 11, 2009

The Fontainebleau Las Vegas LLC and two of its affiliates have filed for Chapter 11 bankruptcy protection, shutting down a $2.9 billion Las Vegas development project and dealing yet another blow to the city’s struggling tourism industry.

The bankruptcy petition stemmed from several funding hiccups and a long legal battle between Fontainebleau and a group of lenders who retracted an $800 million loan, which would have gone to completing the lavish resort.

The lawsuit has since been withdrawn and refiled in a Miami bankruptcy court, along with the Chapter 11 petitions.

The Fontainebleau Las Vegas was set to be a massive destination resort that would encompass a 1,000-square-foot casino, nearly 4,000 rooms and condo-hotel units, a 60,000-square-foot spa, multiple restaurants and lounges, retail space, and conference areas.

At this stage, the project is about 70 percent complete. The site had employed about 3,000 construction workers, and the property was expected to employ 6,000 hotel and casino workers after opening later this year.

The company’s Miami Beach property was not included in the filing. However, the
Fontainebleau Miami had its own share of troubles last week when the ceiling developed an 8-foot hole during a rain storm, gushing water into the hotel’s nightclub just months after a $1 billion renovation.

Las Vegas tourism has been deeply affected by the slumping economy. According to the Las Vegas Convention and Visitors Association, the city received about 3.17 million visitors in April 2009, compared to 3.27 the same month last year, representing a 2.9 percent drop. Las Vegas’ year to date decline is about 7.2 percent compared to the same period last year.

As city's tourism woes continue, Fontainebleau Las Vegas goes into Chapter 11
Fontainebleau Las Vegas / Image via


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