Meanwhile, Fontainebleau continues to negotiate a sale price with Penn National Gaming. If it does, the price, expected to be well below a previous $300-million offer, would become the stalking horse bid, according to the reports by the Las Vegas Sun and Reuters. A stalking horse bid is one that other interested purchasers would have to top in order to be considered by the examiner.

With no update on sale negotiations from Fontainebleau and a motion from the lenders to convert the reorganization to a liquidation, Judge Cristol last week ordered both sides to his courtroom to show cause why he shouldn't appoint an examiner, which he said would cost substantially less and result in a quicker sale than the Ch. 7 liquidation process.

Fontainebleau attorneys reportedly argued against the appointment of an examiner, saying while quicker than the liquidation process it could slow the sale process currently underway. Term lenders, who hold the bulk of the projects debt, spoke in favor of the examiner because it would make for a more transparent process. Previously they argued that the main individual behind Fontainebleau, Miami developer Jeffrey Soffer, was conflicted due in part to his being both a debtor and a creditor in the process.