The developers building the Fontainebleau Las Vegas filed a $3 billion lawsuit against 11 lenders, including several with banking operations in Connecticut, saying their project could be doomed after the banks reneged on their promised loans.
The developers of the $3 billion casino-resort on the Las Vegas Strip are scrambling to keep $800 million in promised funding or find new lenders to save the 3,800-room project and the thousands of jobs it is expected to create.
The institutions 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, N.A.
Bank of America, JPMorgan Chase and Royal Bank of Scotland, parent of RBS Citizens Bank of Connecticut, have bank branches in Connecticut.
“Without these funds — which cannot be replaced in today’s economic environment — the project cannot be finished and will never open,” Fontainebleau attorney Steve Morris wrote in the complaint filed in Clark County District Court. “Construction will cease, contractor liens will accrue and revenues from the project will never be realized.”
The complaint filed in  Nevada’s Clark County District Court alleges that the lenders notified Fontainebleau developers on April 20 that they had “terminated” their agreement to provide an $800 million revolver loan due to one or more unspecified “events of default” by Fontainebleau.
But the developers say they haven’t defaulted on any part of their agreement.
The lawsuit notes that lenders charged in the lawsuit collectively received tens of billions of dollars in federal bailout money that was meant to increase the flow of credit.
A spokesman for Merrill Lynch, which allegedly promised $100 million of the total revolver, declined comment. Attempts by The Associated Press to contact the other firms late Thursday were unsuccessful. (AP)
