Judge To Order Fontainebleau Sale

LAS VEGAS-The Fontainebleau Las Vegas bankruptcy judge on Thursday said he’s decided to appoint an examiner to oversee the disposition of the partially completed $3-billion casino-resort development at the north end of the Las Vegas Strip. An order laying out the examiner’s duties is now being drafted; US Bankruptcy Judge A. Jay Cristol in Miami said he will sign the order next week, according to published reports.

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.