| NEW YORK
NEW YORK Nov 24 Casino firm Harrah's has been
accused by its joint venture partner in a $2.6 billion Bahamas
resort project of fraud in trying to end their deal to build
the resort, according to a court filing.
The dispute is over a deal announced in January 2007
between resort operator Baha Mar Resorts Ltd and casino company
Harrah's Entertainment to build a resort in the Bahamas.
Starwood Hotels & Resorts Worldwide Inc HOT.N was to manage
four hotels at the resort.
Construction on the project was due to start in 2007, with
an anticipated opening in early 2011.
However, the project hit the rocks in March 2008, when
Caesars Bahamas, a unit of Harrah's, sent a letter to Baha Mar
saying delays in the project meant there was "considerable
doubt" about whether it could be financed, given the
deteriorating debt markets, according to the suit.
The suit was filed with New York Supreme Court in June, but
was kept under seal until Nov. 21, a representative for Baha
Caesars Bahamas sought a judgment in March from a New York
Supreme Court judge that it validly exercised its right to
terminate the agreement, according to the filing.
Baha Mar alleged that prior to publicly affirming their
commitment to the project, Caesars Bahamas and Harrah's were
"secretly and improperly plotting to delay or pull out of the
project and ... avoid contributing their $212 million share of
Baha Mar argues it should be awarded money damages in an
amount to be determined at trial "for the harm they have
suffered as a result of the ... fraudulent
A spokesman for Harrah's said the company doesn't comment
on pending litigation.
Harrah's was bought by private equity firms Apollo
Management LP [APOLO.UL] and TPG Capital LP [TPG.UL] for $17.3
billion in January.
Apollo declined comment, and TPG did not immediately return
calls for comment.
(Additional reporting by Paritosh Bansal in New York; editing
by Jeffrey Benkoe)