June 10, 2009 / 4:07 AM / 11 years ago

UPDATE 1-Fontainebleau Las Vegas files for Ch. 11 bankruptcy

* Files for Chap. 11 to facilitate debt restructuring

* Says filing a result of lenders reneging on $800 mln loan * Says filing does not affect its Miami hotel

June 10 (Reuters) - Fontainebleau Las Vegas LLC has filed for Chapter 11 bankruptcy protection to facilitate its debt restructuring after its lenders terminated their commitments to provide nearly $800 million in construction funding.

The company, which had sued its lenders for $3 billion in April for terminating the loan commitment, said it withdrew its $3 billion lawsuit in Las Vegas and refiled the case in the U.S. Bankruptcy Court in the Southern District of Florida.

Fontainebleau reached a provisional agreement with a group of its non-defaulting lenders for the use of cash for the bankruptcy case.

The $800 million loan was in addition to more than $2 billion in debt and equity that Fontainebleau Las Vegas had already borrowed and invested in the 3,800-room resort, which was 70 percent completed.

The company, which is in negotiations to obtain financing to recommence construction at the Las Vegas project, said Fontainebleau Miami Beach was not affected by the filing and would continue to operate as normal.

The Las Vegas project is one of several new luxury resorts slated to open on the Strip, where most operators are already struggling, having dropped room rates and other prices in order to attract recession-wary consumers and businesses. (Reporting by Esha Dey in Bangalore, Editing by Ian Geoghegan)

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