A payment of $220 million to lenders for the CityCenter casino gambling complex construction is due today, and default could also be imminent. While MGM Mirage swears it's prepared to pay its half, partner Dubai World has sued the casino operator and says it's going to not pay its share.MGM Mirage's lenders, including Bank of America, have said they won't allow MGM Mirage to make its payment if Dubai fails to honor its share of the debt. The dispute could send the CityCenter albatross into chapter 11 once this weekend.
The potential work stoppage on the monstrous resort project could send ripples within the Las Vegas economy. MGM Mirage has already been hunting unsuccessfully for greater than 1000000000 dollars in financing to finish construction. Now Dubai's suit, alleging breach of contract by MGM Mirage, makes Las Vegas insiders wonder whether CityCenter will drag down the MGM empire with it.
Thousands of jobs are depending on CityCenter's moving forward. In a depressed Las Vegas economy, unexpected unemployment of greater than 10000 operating personnel can be a devastating blow.
Long-time Vegas observer Henry Ebanks says MGM Mirage won't exist in its current form much longer. Restructuring of debt to transform credit covenants will save the company, but in a way smaller version, as several properties is frequently sold.
"For Las Vegas visitors, the results of the recession could be a return to more individual ownership of casinos, in place of MGM or Harrah's owning everything. The presence of increased competition can only make for a greater tourist experience."
Published on March 27, 2009 by PrestonLewis
Read More... [Source: MGM Casinos in the News]
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