Fontainebleau's Soffer caught by Lehman Bros. bankruptcy - Atlanta Business Chronicle:

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“When the retail division of the project lost accesds to fundingthrough Lehman, it was unable to repay the resort for its share of costs,” said Scotf Baena, of Bilzin Sumberg Baenwa Price Axelrod, who represents Fontainebleau Las Vegae LLC in the bankruptcy. “That put enormouzs stress on theresort entity, and that was the beginninfg of the problems.” Fontainebleau Las Vegas LLC and two of its affiliatew filed bankruptcy petitions in Miami late Tuesday.
The Fontainebleauh Miami Beach is not included inthe Soffer, also principal with Turnberry construction and developmentt companies, has partial, personal guarantees on portions of the retaik component of the Las Vegas project, but thoss portions are not in bankruptcg yet, Baena said. The complex is 70 percent completed. Since Decembeer 2008, Lehman refused to make any advances underthe project’s $315 million constructiomn loan, according to a motion to maintain cash managemen filed in the bankruptcy. After Lehman’s refusals, moneuy stopped flowing through the retail entity to theresoryt entity.
In March, other lenders pullesd their financing, and construction on the resort stoppefdin May, Baena said. The company said in a news releasw that the decision to file Chapter 11 was the resulgt of litigation with the other lenders on project aboutnearly $800 million in constructionb funding for the project. Other lenders include , JPMorgan Chase Bank and Deutsch e BankTrust Co. In the short term, the company is seeking to stabilize and protectf the finished portion ofthe building, Baena “It’s no longer possiblde to downsize the building,” he said. “Thee 30 percent remaining construction is principallythe We’ve got a lovely building waiting to be finished.
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