The Best Of Celebrities In 2009!
Nov 15, 2009 9:10 pm US/Eastern
Creditors Say Fontainebleau Owes Them Millions
MIAMI BEACH (CBS4) ―
This time last year, the Fontainebleau Miami Beach's $650 million makeover was drawing A-list celebrities and taking center stage as Victoria's Secret models glided through the hotel's posh lobby in preparation for the nationally televised lingerie fashion show.
But there was a heavy price to pay and contractors are alleging they are still owed money to the tune of $60 million, according to CBS4 news partner The Miami Herald.
Developer Jeffrey Soffer owns half of the hotel venture with Dubai's investment group backed by the government, which owns the other half. The group invested $375 million. The deal allows Nakheel Leisure to restructure any problematic loans.
Nakheel is now exercising that option and working with Soffer to possibly file for Chapter 11, Hamza Mustaffa, Nakheel's managing director, told the newspaper.
``We haven't made a decision right now if we're going to file, or if we're not going to file,'' Mustaffa said.
He added that Soffer remains a strong partner in the venture and he remains in charge of the hotel.
``This is not us saying, `Jeff, you're out and we're in,' '' Mustaffa said. ``We've been working together.''
Soffer declined the newspaper's request for an interview, but released this statement: ``The Fontainebleau is performing well above its peers and we're very pleased with our progress in what's been a challenging economic environment. We continue to work closely with all of our stakeholders, including our partner Nakheel and our lenders, to position Fontainebleau Miami Beach for long-term success.''
Soffer suffered a major setback in 2007 when banks stopped funding the $3 billion Fontainebleau Las Vegas – an ambitious 63-story casino hotel. Instead, the hotel went bankrupt.
The fear now is that creditors from the failed Las Vegas sister property might also go after the Fontainebleau Miami Beach.
(© MMIX CBS Television Stations. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. CBS4 news partner The Miami Herald contributed material for this report)
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